Non-Profit Wage & Hour Compliance

In our previous article, we looked at how wage and hour compliance issues can affect a small business. But what about non-profit organizations? It’s a question we recently asked Adam Hollenberg, Regional Sales Manager with nettime solutions and stratustime.

How One Non-Profit Cut Costs and Stayed Compliant

“The issues around wage and hour compliance affect non-profit organizations just as much, if not more so,” he says. Echoing this sentiment is Tara Hood, who’s been working with non-profit organizations for more than a decade. Currently, she serves as the Director of Grants Management for a non-profit based in the Southeastern US.

“Payroll is the biggest cost for every non-profit,” she says. “And not knowing whether you’re going to retain your funding or not is the biggest worry for every non-profit.”

When these two concerns collide, it can cause a lot of stress for staff members, and can send an organization in a spiral that’s difficult to climb out of.

For Non-Profits, Wage and Hour Compliance Issues Are Often Related to Timesheets

When compliance issues are related to timesheets, it can be extremely detrimental to a non-profit’s viability. In part, this is because state and federal regulations require agencies to demonstrate the sources and uses of funds they receive.

“On a timesheet, these have to be accurate to the letter,” Hood says. As she explains, a typical organization’s programs usually have multiple funding sources—even as many as four or five different funders.

“To be compliant, you have to demonstrate how much time each staff member spends on each project,” she adds.

And when they don’t?

“If your organization is non-compliant in how it tracks projects,” Hood says, “you’re putting yourself at risk of having to deal with audit findings and payback issues.” Over the course of her career, she’s seen millions of dollars in unallowable costs go back to funders because timesheets were non-compliant.

“You need a time & attendance system that lets you add in project codes that coincide with allocation worksheets,” she says.

Ideally, an organization’s time & attendance system will allow employees to demonstrate where activities occurred. Doing so makes it easy for the organization’s financial department to know which funding source they should charge for certain time.

Non-Profits Should Spot Wage and Hour Compliance Issues Early

Leaning on her long non-profit career, Hood knows how to spot red flags right away. When she started her current position, she dove into the organization’s previous time & attendance software. To her dismay, she discovered pretty quickly that their existing time & attendance software was not built to make things easy.

“Every time we needed to add a new job code (to identify a funding source), for instance, we needed to put in a ticket with the previous vendor.” Doing so was time-consuming and also costly, since each ticket came with a charge.

What Hood and the organization wanted was a time & attendance solution that allowed them to manage these changes in real time—add job codes on their end, and know that their staff members would have an easy time following through when they switched between projects and programs.

To solve her organization’s time & attendance needs, Hood turned to stratustime. Doing so helped alleviate concerns about matching timesheets to project codes, and avoiding audit findings that would put her organization in a tough situation. Read more about Hood’s story in our recent case study, “Clock In on Compliance.”

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“For a non-profit organization,” says Hollenberg, “your salaried staff is often your biggest resource. Making sure your time & attendance system documents their time properly is essential.”

Even in organizations with hundreds—or even thousands—of volunteers, salaried employees are vital to daily operations, program management, special event planning, and the extension of the non-profit’s mission into the community. In fulfilling these critical tasks, employees need to be meticulous about how they complete their timesheets.

“The bottom line is simple,” Hood adds. “Non-compliant timesheets are the number-one issue that come up in audits—and audits happen all the time. It’s not if, but when. Unfortunately, this one issue is also the number-one reason why organizations wind up paying back their funding. With stratustime, we can add job codes on our own, and easily generate timesheets that are in compliance with regulations.”

With ever-changing wage and hour regulations, having a flexible, easy-to-administer time & attendance solution is essential, especially one that gives you more control when you need to make changes. stratustime’s simple and flexible time and attendance solution can help you keep your non-profit and/or small to mid-sized business in compliance with wage and hour laws and regulations. Give us a call, and we’ll put stratustime on the clock for you.

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