#MaxFlex vs clock on clock off: are you getting the balance right

MaxFlex: we all want it and some of us are demanding it

COVID-19 has given us a new lens through which to consider what’s possible when it comes to work flexibility. Pandemic Restrictions constrained our choice. But they also enabled many to experiment with working in a completely new way. Which has brought forth more choices as we move towards something resembling normal.

I ran Linked-In a poll in December 2021 showing 75% of respondents would leave their job if they couldn’t work from home at least some of the time.

A recent report from Telstra and Deloitte Access Economics found that 54% of those surveyed considered hybrid working to be as or more important than a 5% pay rise.

When working from home, many of us adjust our hours around our preferences and commitments rather than ‘standard’ hours. Our hybrid working survey mentioned above identified 25% of organisations experienced flexibility in when work was performed.

MaxCompliance: paid by the minute....

How does the desire to achieve MaxFlex intersect with an Industrial Relations system built around remunerating time rather than effort? It may have suited you to do the work at 6 am before it was light enough to do your morning run, but, this may well attract a higher rate of pay under the applicable award. ?

The Fair Work Regulations require that records are kept of any overtime hours worked.

Employers need to know, and retain records when employees work late or early or longer than the standard hours set out in their award or enterprise agreement. Start and finish times, and the timing and frequency of breaks are all relevant to employees’ entitlements. We touched on these challenges in a Deloitte Workplace Integrity Webinar .

Employees on ‘salaries’ don’t operate outside this framework – they are also entitled to be paid at least the equivalent of what they would get if they were being paid ‘by the hour’.

How do you know this without visibility of what they work week to week?

What’s the answer?

Sorry to say, there’s no single solution. No silver bullet.

There are so many variables that are particular to the organisation, the sector and the workforce. Organisations must balance a range of issues – their culture, systems and risk appetite.

What is universal is that it is Mission Critical to look closely at the interaction between your remuneration levels and the baseline entitlements for each employee.

I can’t tell you how many people have said to we at Deloitte: ‘we pay well in excess of minimum rates….we have a generous ‘buffer’. But when you interrogate work patterns, including in busy times, you see how easily that ‘buffer’ disappears.

The other part of the equation is, of course, the work patterns– the real ones, not just the standard, or regular, or rostered work patterns. You need reliable visibility of the hours worked at different times. Remuneration needs to cover the busy periods as well as the quieter ones.

If your employees record their time, then you have the inputs you need to know you are paying them right. If you don’t have visibility of time worked, then your ‘buffer’ needs to be more generous to cover off the contingencies of people working early, late or on weekends.

There’s no getting away from it, the way to minimise your risk and maximise confidence in your compliance is to have a system to record time worked.

In our experience, the most reliable systems to ensure pay reflects work done are...

Automated, Integrated and Embedded

Whether time worked is recorded ‘in real time’ eg clocking on and off’ or uses at end of a period by employees/managers, or based on exceptions reporting ie ‘extra’ or varied hours to the ‘standard’ reported …..

Integrate

Do your systems talk to each other? Rostering, time recording and payroll ideally should. Rosters are not time and attendance records. They reflect the intended hours worked, but variations are inevitable and time recording ensures you capture them. In our remediation work, if we see time and attendance records that are identical to rosters, we immediately wonder if people are recording real time or whether the culture has been to reflect the rosters.

Automate

The more automated the better. Systems that alleviate the need for individuals to clock on and clock off manually, or minimise the effort involved are more likely to reliably record hours worked.

Manual work arounds or high reliance on input from employees or managers increases risk of error or information not been entered at all. We’ve seen so many records with significant data gaps or anomalies that indicate they aren’t complete or they aren’t real.

Embed

This is perhaps the most important element. Embedding the proper use of your systems culturally throughout your workforce.

Consider the processes and controls you have in place to ensure people understand what they need to do, and do it.

This means understanding are there any disincentives to accurate time recording. Is there an overtime budget that doesn’t reflect the overtime that needs to be worked to get the job done? Do managers really know and ensure accurate hours are recorded for their people AND for themselves. We’ve seen some big remediations involving salaried managers who have not been recording their own hours.

Oversight also needs to be embedded is – the right governance and reporting to ensure clear lines of accountability up to executive and board level.

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