As you may have heard by now, the Department of Labor has officially gone digital with the release of its new iPhone app. According to the DOL, the application is "a timesheet to help employees independently track the hours they work and determine the wages they are owed."
In their news release, the DOL makes reference to what may prove to be a compliance razor blade inside of this App:
This new technology is significant because, instead of relying on their employers’ records, workers now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.
Secretary of Labor Hilda Solis said that she is “pleased that my department is able to leverage increasingly popular and available technology to ensure that workers receive the wages to which they are entitled. . . . .This app will help empower workers to understand and stand up for their rights when employers have denied their hard-earned pay."
From my view of the App(le) tree, it seems like this App is an updated version of the pencil-and-paper method that we used to keep track of our time in the days before smartphones. It's a modern twist on an old idea. If you're more comfortable working with bits of information than bits of paper, then by all means use it to track what you need to track.
I think there are some problems, however, when it comes to using this App in the context of a wage and hour investigation. First, there's the age-old "He Said She Said" problem. The DOL suggests that if an employee claims that her employer failed to maintain accurate records, the records contained in the App would be "invaluable". But the real question is which information is correct - or, as is often the case in real life, closer to being correct. Assuming that the employee's electronically maintained hours data is more accurate than the employer's data is a big leap.
But - and this is important - if an employee has been misclassified as exempt and the employer hasn't tracked that employee's time, the employer can't refute the employee's claim regarding how many hours have actually been worked. In situations like this, I can see how the records contained in the App would be "invaluable" to the employee and the DOL.
Additionally, the automatic pay calculations provided by the App may not be accurate. Overtime pay calculations are based on the regular rate of pay, which is not always the same as the hourly rate of pay. In some cases, bonuses, shift differentials, and other kinds of compensation factor into the regular rate of pay. The DOL App currently cannot support these "non-standard" types of compensation, and the amounts calculated by the App may be inaccurate in some cases. It's likely that this issue won't create a compliance problem, just more inquiries for payroll to field on why a paycheck doesn't match the amount calculated in the App.
The App may also be a new source of pay information (of questionable reliability) for the DOL - it does contain contact information for the Wage and Hour Division, and users can add comments and email the summary of work hours and gross pay as an attachment...
The bottom line is that, ultimately, this App is a tool. And like all tools, what really matters is how its used. I'm guessing that in most cases employers aren't going to find razor blades inside of the App. Your employees will use this tool just like the pencil-and-paper method of my day, if they use it at all - as of January, there were more than 350,000 Apps competing for limited real estate on iPhones. But based on the DOL's comments, they have very high hopes for this App. If it lives up to the DOL's expectations, there just might be a compliance razor blade inside.
Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. For more than a decade, she's been working with businesses and government agencies providing expert analysis. Stephanie has published several articles on examining compensation systems with respect to internal equity, and has appeared on NPR to discuss the gender wage gap. She is the host of The Proactive Employer, and is the founder of Thomas Econometrics. Follow her on Twitter at ProactiveStats.
Nicely done. I wrote on the same subject, but not as thoroughly as you did.
Posted by: Michael Haberman SPHR | 05/23/2011 at 09:58 PM