It is now more important than ever for companies to guarantee that their workers receive fair compensation in a world where employment regulations are getting stricter. 

Cases where franchisors have been held accountable for underpayments inside their franchise networks have made headlines frequently.

These incidents result in severe legal consequences and harm the franchise's brand. 

Nevertheless, Roster software offers a proactive approach that can aid in eliminating such circumstances. 

We'll talk about the value of fair compensation in this blog post and how roster software can drastically improve compliance and reduce underpayments.

The Rising Issue of Underpayments:

In recent years, allegations of underpayment have presented legal issues for a number of franchisors.

The franchisors involved in these cases have suffered reputational harm as a result of the widespread publicity that these cases have received. 

Franchisees who mismanage their employees' wages may face underpayment difficulties, resulting in investigations that often involve the parent company.

What are the Legal Consequences:

Franchisors found liable for underpayments can face severe consequences such as:

(i) Substantial Fines - A famous Coffee chain was fined $475,000 for exploiting young Taiwanese students through internships from the year 2016-17. 

(ii) Legal costs 

(iii) Damages the brand image

(iv) Affects the Profitability and growth of the business

How Roster Software Can Prevent Underpayments:


Automated Payroll Calculations :

Payroll calculations can be automated with roster software, ensuring that workers are paid correctly and in accordance with labor regulations.

It reduces the possibility of human error, which frequently results in underpayment problems.

Real-time Tracking

Employee hours can be tracked in real time with roster software. 

It helps managers and franchise owners keep an eye on the activities of their staff and make sure that staff members aren't overworked or underpaid.

Compliance Alerts:

Compliance alerts serve as a feature of the majority of present-day roster software. 

These alerts notify management when they are approaching labor law thresholds, helping them stay in line with rules and regulations.

Centralized Data Management:

Roster Software centralizes employees' data, making it easier to maintain proper records and simplifying audits or investigations.  

By doing this, the possibility of underpayments due to inaccurate or missing records is decreased.

Customisable Reporting:

Roster software allows franchise owners to generate customisable complete reports that can be used to assess labor costs, compare wage expenses to revenue, and identify areas where cost-saving measures can be applied.

The growing number of cases in which franchisors are held accountable for underpayments serves as a reminder of the significance of fair compensation and compliance with labor laws. 

Franchise businesses need to be proactive in preventing underpayments. 

In this process, roster software proves to be a useful tool, providing automated payroll calculations, real-time tracking, compliance notifications, consolidated data administration, and personalized shift reports.

Owners of franchises can protect their brand's reputation and guarantee that their staff members are paid properly by using roster software, which will increase employee productivity and motivation.

As the business world evolves, staying ahead of labor compliance issues is crucial for success, and Roster software can play a crucial role in achieving that goal.