Time Tracking and Payroll based on Prevailing Wages and/or Productivity with Project Management Software

Prevailing Wages based Time Tracking

This is the most commonly used time tracking method. The tasks and milestones are defined and setup in a project. For each task, the estimated timeline and resources are assigned. Each task can also link to a budget line item. Any number of project team members can be assigned to a task for its execution. Each team member can be authorized to enter and submit timesheets where they would identify and quantify the amount of time spent on each task. The task owners (such as a project manager, superintendent or foreman) update the percentage of completion of their tasks. In cases where the team members are not able or allowed to enter the timesheet information themselves, the superintendent or foreman can enter the time for their team members on a daily or weekly basis. Timesheets need to be controlled by a workflow management system where the necessary reviews and approvals are enforced by the system. Once the timesheets are in place, the system must collect all posted time, calculate the cost and revenue associated with each task and provide such information using pertinent reports. In addition, the system should be able to collect the approved employee timesheets and submit them to payroll for processing and payment. The costs associated with an employee and his or her related tasks are based on prevailing wages which are stored in the system.

Productivity based Time Tracking

The Productivity Based Time Tracking approach is very similar to the Prevailing Wages Time Tracking approach with respect to reporting to payroll and overall setup of tasks. However, it incorporates the extra dimension of productivity and its related considerations. For example, a company puts a productivity payment of certain amount for each sizing and placement of the wood members in a construction job. The more an employee accomplishes, the more they can gain within an overall budget. This approach requires some additional steps in managing employees’ time and payment compared to the Prevailing Wages Time Tracking approach. Below are the considerations when using this approach.

• The Productivity based wages cannot be lower than the minimum wage according to the law. Therefore, when using this approach, the equivalent Prevailing Wages salary needs to be calculated so that the greater of the two is paid to the employee.
• The Productivity based budgets are allocated to employees based on the completion of each of the subtasks.
• When an employees is paid the minimum wage because it was the higher amount of the two, the difference between the minimum wage and productivity based amounts are calculated and taken off the next productivity based budgets.
• The superintendent or foreman distributes the productivity based budget among the team members as the work is completed.
• The Prevailing Wages Time Tracking does not need to be calculated at the subtask levels.  It is usually done at a higher level task.

Conclusions

Although Productivity Based time tracking is not as common as the prevailing wages time tracking, project management software systems need to manage both approaches. The project management software should allow the deployment of the Productivity Based time tracking if and when it becomes needed. The Productivity Based time tracking might be a good tool for motivating the project team members.

About Axxerion Project Management Software

Axxerion project management software is completely web-based and manages the entire project lifecycle. It handles project teams, project tasks and timeliness and project budget. Axxerion project management software manages the contracts issued to the project suppliers, contractors, subcontractors and consultants. The system manages project documentation including correspondence, drawings, emails, photographs and videos. Axxerion project management software manages change orders and related correspondence such as Requests for Information (RFIs). Axxerion project management software has a powerful workflow management system built in to handle the approvals, reviews and notifications related to any aspects of the project. With Axxerion project management system, you can get up and running in a matter of minutes without needing to buy or add any other software or hardware to your environment.

About the author

Mehdi Khalvati, Ph.D. is the president of Axxerion USA. Axxerion’s CMMS module  addresses corrective, preventive and predicative maintenance as well as asset management.  Please send your feedback, thoughts and comments to mehdi@axxerionusa.com.