How to Make Sure Your Field Employees Are Paid Properly?
Emily Maina
Last update on:
August 9, 2024 10:46 AM
Published on:
August 18, 2021
Your employees are your company’s greatest asset. It sounds like a corny cliche, doesn’t it? But it’s true. If you fail to attract and retain top talent, your business won’t successfully grow and thrive. If you want to manage a rockstar team, your first task is to do what it takes to be a great employer.
There are many facets to being a great employer, but one of the most important things potential employees look for is your consistency in properly and fairly compensating your workforce. Although paycheck size isn’t among the top reasons why employees leave their jobs, it goes without saying if they’re not satisfied with the way you treat and compensate them, they will look for another job.
Providing fair compensation to most workers is fairly straightforward. However, when it comes to issuing fair pay for field workers, challenges may arise. This article will help you navigate how to make sure field employees are paid properly for their work.
What Are the Different Types of Compensation for Field Employees?
Before we start discussing our article’s topic and offer you tips about how to properly pay an employee, it’s a good idea to talk about the different types of compensation offered to field employees.
1. Hourly compensation
Employees who work on an hourly basis receive hourly compensation, which means that they’re paid based on how much time they spend working.
Hourly compensation is suggested for employees who do not have a consistent work schedule or who opt to work part- time instead of a full-time position. This compensation plan can be a great option for businesses just starting up since it allows for staffing level adjustments as you determine worker roles.
It’s worth mentioning that hourly workers are non-exempt. According to the Fair Labor Standards Act (FLSA), hourly employees are eligible for overtime pay. If you fail to comply with these regulations, you risk costly lawsuits and penalties.
2. Fixed Salary
Salaried employees receive an annual salary, and are paid a fixed amount on payday. These employees usually work in corporate or administrative positions and have a predictable work schedule which makes compensation in the form of a fixed salary extremely easy.
Employees who receive a fixed salary are often classified as exempt workers, which means they don’t qualify for overtime pay. For example, salaried employees in professional, executive, administrative, or outside sales roles are typically exempt and not eligible for overtime pay.
Misclassifying employees as exempt when they are actually non-exempt can have legal repercussions for your business. When classifying employees, be sure to double check that employees meet the necessary criteria to be classified as exempt. You can learn more about classification specifics in our article on compliance with FLSA and overtime pay laws.
3. Commission-Based Compensation
Employees who work on a commission basis are paid a predefined sum of money after they complete a certain task. Commission-based compensation is common in the field of marketing and sales where employee performance determines the level of compensation a worker receives.
While some employees are paid a base salary along with a percentage of sales closed, other employees are paid solely based on the number of sales they make.
Field Employee Compensation: Recap
Aside from the compensation options listed above, employers also provide several financial benefits to their workers, which may include:
Overtime Pay: Many jurisdictions require employers to pay overtime to employees who work more than a specific number of hours in a workweek. It’s important for field workers to be paid for overtime, especially in cases when they work long hours or irregular shifts. Overtime pay is typically calculated at a higher rate than the standard hourly wage.
Bonuses: These additional payments are awarded to employees based on work performance, company profits, or other predetermined criteria. Bonuses can be used to reward employees for exceptional work, incentivize goal achievement, or share the company’s success with employees.
Allowances: Field employees often incur work related expenses associated with transportation, meals, and equipment. Company allowances cover these expenses and offset employee costs. Allowances vary depending on the nature of the job and the company's policies.
Best Practices For Providing Fair Pay to Field Employees
Providing fair pay to field employees encompasses more than just paying base wages. It involves accurately compensating employees for any work performed.
Ask yourself the following questions about an employee when providing fair pay:
Has this employee worked any overtime hours during the pay period?
Will the employee qualify for any reimbursements?
Will the employee’s pay adhere to minimum wage laws?
Fair pay should also take into account things like the type of work being performed, industry norms, the cost of living, and employee experience.
There are several steps you can take as an employer to make sure your employees are paid correctly.
Establishing Clear Compensation Structures
Clear compensation structures prevent misunderstandings and guarantee equitable compensation. When defining your compensation structures, begin by drafting a policy that includes specific job titles and descriptions that list duties, responsibilities, and salary ranges. By including this information in your company policy, managers and supervisors will be better equipped to delegate responsibilities and lead teams.
Make sure to cover important topics in your company policy, such as:
Pay equity. State what equal pay is in America as per the Equal Employment Opportunity Commission (EEOC).
Salary negotiations. Address the grounds for salary increases and bonuses, such as performance metrics.
Pay scales. If the industry implements pay scales, make sure to include them.
Job postings. Describe what should be included in department job postings.
Keeping Precise Time and Attendance Records
A reliable time tracking system is needed to compute accurate compensation. Instead of using outdated manual logs, use the best time and GPS tracking apps to effectively monitor your employees and record the hours they work. Workforce management apps will come in handy when you need to verify an employee’s reported overtime hours.
Keep in mind, when adopting new software, it is important to protect employee data and comply with relevant privacy regulations to maintain trust with your workers and avoid legal repercussions.
Communicating Openly with Employees
Employees thrive in environments where they feel comfortable enough to openly communicate with their employers. Having a responsive approach to employee concerns demonstrates your commitment to resolving issues like pay inequity or wage gaps.
Using Payroll Software
Once employee timesheets have been verified and your workers are ready to be paid, payroll software takes away the headache associated with issuing fair compensation. Integrating time tracking software with your choice of payroll software creates a seamless workflow to save employers time and minimizes the risk of errors.
Complying with Labor Laws and Regulations
Labor laws must be strictly adhered to if employers want to avoid legal penalties. Employers should stay up to date on any changes made to federal, state, and local regulations concerning employment standards.
Employers should strive to understand regulations about:
Minimum Wage
Equal Work as defined by the Equal Pay Act of 1963
Gender Pay Gaps
Pay Transparency
Wage Discrimination based on sexual orientation, gender identity, or demographics
Other labor laws of interest to employers include child labor, meal and rest breaks, and employee leave. Due to the complexity and frequent changes in labor laws, employers may benefit from consulting with human resource professionals or legal experts to stay compliant.
Why Is It Important to Pay Employees Fairly?
The main goal for most businesses is to increase profit and minimize costs. Some business owners may view employee compensation as an expense when in reality, it is an investment that has the potential to greatly improve the company’s bottom line.
Paying employees fairly benefits businesses in the following ways:
It ensures compliance
Lawsuits resulting from non-compliance with wage and hour laws can be complex and stressful. Offering fair compensation to field employees reduces the risk of encountering costly legal issues and penalties. A well-structured compensation plan is a smart way to safeguard your business from compliance risks.
It motivates your employees and boosts productivity
Happy employees are more productive than those who are not satisfied. When people feel valued and rewarded for their work, they’re more likely to go the extra mile.
Studies show that 69% of people would work harder if they felt appreciated. A strong compensation plan that includes bonuses, shows your team that you recognize and appreciate their contributions.
It helps attract and retain top talent
Top performers are approached by recruiters quite frequently. If you want these rockstar employees on your team, you need to offer them a competitive package. People know their worth and expect nothing less than what they deserve when it comes to compensation. With 75% of job seekers researching companies before they even submit an application, having a strong employer reputation plays a huge role in securing top talent.
It improves employee retention
Losing employees is expensive, and frequently onboarding new workers can be time consuming. The average cost to replace an employee is over $4,000, and it takes about a month and a half to fill a role.
When employees are compensated well they are more likely to stick around. This means you'll experience fewer costs resulting from turnover and be able to maintain a stable team.
How Can Companies Provide Fair Pay to Their Field Workforce by Using Timeero?
Timeero is a time and location tracking tool designed to help businesses manage their workforce efficiently. This app can be advantageous in several ways when it comes to making sure employees are compensated accordingly. Let’s take a closer look at how Timeero can benefit your business.
Accurately Tracking Work Hours
As an employer, it is your duty to see that each employee receives their full compensation and benefits. If you fail to do so, you risk being sued multiple times, which may bankrupt your company and damage your business reputation.
Wage theft is a serious felony that occurs when an employer intentionally fails to compensate employees appropriately. To avoid mistakes that could lead to legal repercussions, use a time tracking app like Timeero to accurately record employee hours.
Timeero’s user-friendly design allows your workers to clock in and out with ease, even when they're on the go. The app's GPS functionality provides accurate location tracking, preventing time theft and ensuring that employees are paid for the hours they actually work.
Workers can clock in and out on the Timeero mobile app.
By implementing this software solution, you can avoid employee time theft tactics like buddy punching by co-workers that result in you making payments for work that has not been done. Timeero's facial recognition functionality helps mitigate this issue. Employees take a photo of their face when they clock in and the app's facial recognition technology scans the uploaded image to verify employee identity.
This high tech feature allows you to verify that an employee's timesheet is correct without having to invest in fingerprint readers or expensive hardware.
Monitoring Field Employees
Keeping track of field workers can be challenging, especially for teams that are always on the go. Timeero’s GPS tracking capabilities provide you with real-time location data, allowing you to:
Verify employee locations
Track employee arrival and departure times at job sites
Optimize routes and schedules
Identify potential travel issues
Timeero also offers geofencing technology which allows you to set up virtual boundaries around specific job sites or client locations. When an employee enters a geofenced area, the system sends a notification prompting them to clock in. If they attempt to clock in outside the geofence, they will receive an alert displaying a message that tells them they cannot clock in from an area outside the job site’s boundaries.
Workers can’t clock in while outside the geofence.
Compensating for Overtime
According to the Fair Labor Standards Act, American employees are classified as exempt or non-exempt, which determines whether they qualify for overtime or not. Exempt workers who work overtime should be paid at least 1.5 times their hourly wage for overtime hours.
Additionally, each state may have their own unique overtime regulations. For example, one state may define overtime as time worked after 40 hours, while another may determine that overtime starts after an employee works 46 hours.
Employers must find effective ways to track and calculate overtime pay to comply with overtime laws. This is where Timeero can help. The app lets you set an overtime threshold, and once employees reach that threshold, managers and administrators are notified.
You can also create a custom overtime threshold that applies to non-exempt employees who don’t qualify to receive overtime. When employees approach the overtime threshold, the app automatically clocks them out after a predetermined number of hours to prevent them from working off the clock and accruing overtime hours.
Enforce overtime rules by enabling automatic clock outs.
Timeero allows you to set individual overtime restrictions for specific people or groups through its Multiple Overtime Rules feature. If your employees are dispersed throughout multiple locations, this feature will simplify your time tracking processes.
Create multiple overtime rules in Timeero.
Note: Employers in California can use our California overtime calculator to easily determine overtime pay in accordance with state laws.
Paying Back Mileage Costs
If your employees use their personal vehicles for work-related purposes it’s only fair you reimburse them for costs associated with mileage. To make the reimbursement process easier, Timeero automatically records an employee’s mileage down to the minute throughout their workday.
Employees using Timeero can easily log the details of their business trips such as, trip date, starting and ending points of travel, and total miles driven without having to manually track any data themselves.
Timeero’s mileage tracking feature.
The app also automatically calculates reimbursement based on the current IRS mileage rate or your company mileage rate, which saves you valuable time and reduces incidents of accidental errors.
Using Timeero to track mileage is a great choice if you want to issue fair compensation to your employees while also maintaining accurate records for tax purposes. To further speed up your reimbursement process, we have created an easy-to-use mileage reimbursement calculator to save you time.
Timeero begins tracking mileage when your custom speed threshold is met.
If employees encounter additional expenses on business trips such as parking fees, tools, and unexpected oil changes, users can upload notes and photos of their receipts directly onto their timesheets. This means administrators will no longer need to sift through paper receipts which makes the reimbursement process so much easier.
Workers can upload notes and photos of additional expenses to timesheets.
Streamlined Payroll Processing
While underpaying employees can lead to legal problems and low employee morale, overpaying your workers can be costly for your business and result in financial losses. Overpayments can occur for a variety of reasons, some of which include administrative mistakes, reporting errors, or improperly processed unpaid leaves of absence.
Timeero seamlessly integrates with popular payroll systems which eliminates the need for manual data entry. Integrating with payroll systems also reduces instances of overpayment.
By automatically exporting time and attendance data, the software guarantees that employees are paid accurately and on time.
Use Timeero’s Additional Features to Issue Fair Pay
In addition to the features listed above, Timeero has other features to help you fairly compensate your employees.
Additional features include:
Break tracking. By tracking the breaks employees take, employers can compensate employees for paid breaks and potential premiums. The software offers three break types: automatic breaks, manual breaks, and the California breaks tracker (California businesses only).
Scheduling. Managers can create schedules, assign shifts and handle PTO requests conveniently in the app. A scheduling system that accurately documents time off helps companies avoid losing money from undetected pay disparities and keeps employers from issuing paychecks to employees who are on unpaid leave.
Reporting. Timeero allows you to generate custom reports that provide a breakdown of hours worked as well as miles traveled. Records are stored for a period of four years, and can be accessed by employers in case of an audit, dispute, or for other reference needs.
Segmented tracking. Managers can verify where employees are at any given time. This tool fosters transparency and encourages employee accountability since admins can track how each worker spends their day.
Use Timeero to Stay Compliant When Paying Employees
Properly compensating your workers can be a challenge, especially if you run a small business and are new to this playing field. The trick to navigating fair compensation is to keep your field workers satisfied by paying them properly and providing good working conditions. It is also important to follow federal and state laws as well as any legal regulations regarding worker compensation.
Timeero can help you simplify payroll processing. The app is equipped with tools that will greatly improve how you track and record employee hours and handle payments. Check out our detailed Timeero review to learn more about how this app can benefit your business.
Timeero Helps You Stay Compliant.
The #1 GPS time clock ensures reliable and accurate data.
Emily Maina is a tech-savvy writer with a passion for creating content. With years of experience in the industry, she is well-versed in the latest trends and developments in the tech industry. When she’s not working, Emily enjoys exploring the great outdoors or watching her favorite shows.
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