Payroll and Geolocation Technology

Many new technologies have embraced geolocation to combine location information and other data to obtain specific results. In this article we’ll explore geolocation technology, and will examine the effect on payroll. Geolocation, by definition, is the ability to detect and record where people are located, using Internet-connected devices. Geolocation information can be determined from the user’s IP address, the MAC Address of the device, RFID, a Wi-Fi connection location or GPS coordinates.
Human Resources and Payroll departments have many location-based challenges in managing their workforce; companies also have concerns regarding their equipment. With the rise of centralized service centers, there is less local contact and knowledge of location based requirements. Many mobile workers do not report to a physical location, may work from home, or may spend their day at several locations.
The growth of smartphones and other mobile devices opens another way to communicate with employees. Smartphone growth in the US has been phenomenal: from December 2009 to December 2011, the number of devices went from 30 million devices to 95 million. Smartphones have achieved a near 80% saturation among the 18-34 year old age group, with more growth now occurring among people in middle age. With the growth of the devices, many companies are looking to leverage them.
To start, smartphones and geolocation have been embraced by social media (Facebook, Twitter, GoWalla, etc.) Many businesses now deploy social media to target their customers for loyalty rewards, reviews, special offers, ads and coupons. It is inexpensive, and provides them with added connection with and knowledge of their customers. Example: if a user logs in to an application within a few blocks of say a restaurant, a special offer can pop up on their phone. Customers that check in on a site may get a free offer or item.
But how do HR and Payroll benefit from this growth in geolocation?
Here are some examples:

1. An innovative use of geo-location capabilities is offered by FotoPunch. Using simple text messaging (or smartphone apps) on cell phones, along with very unique geo-location technology and facial recognition software, the device becomes a biometric virtual timeclock. As CEO Patrick Behrbom explained: 'Using these new technologies helps payroll departments to reduce their overpayments, eliminate buddy punching, and generate more detailed reporting for work locations. It also visually confirms that employees are on the job and representing the company as expected.'
2. Payroll software applications use geolocation information to precisely determine the tax settings for withholding calculations. Chad Brenneman, Director, SaaShr Services & Support at SaaShr, a Kronos company advised 'We leverage information gathered directly from local taxing authorities. Using the exact latitude and longitude, it accurately displays which taxes to apply for the employee.'
3. Another variation using geolocation capabilities is called geofencing. Geofencing is a virtual perimeter around a real-world geographic area. Originally used as a child location service, it has now been applied as a way to manage a resource (equipment and people), with alerts when the asset is outside the expected work location area. This capability has helped return lost/stolen equipment and identified if an employee is away from the work sites.
4. Applications such as Symmetry Software’s Payroll Point® combine geolocation technology, tax information, and mapping services to help payroll departments determine and audit the proper withholding settings in their payroll systems. Linda Adams, Assistant Manager Tax and General Ledger for global travel company BCD Travel, states “For payroll people trying to hit a moving target with payroll tax information that gets more and more complicated each year, Payroll Point is a lifesaver.”

Most companies do not have a policy in place to address the use of geolocation. A few suggestions:

1. Your policy must be written and communicated clearly to the employees. Generally, an employer is on safe ground using GPS devices to track employees if it their policy instructs employees that it may use tracking devices to monitor employees’ whereabouts during work hours and will not monitor them outside work hours.
2. When questions arise, there must be a method to use for investigation. Applying corporate decision policies based only on GPS results can be imprecise, and an employee could have an rational explanation for having been at a particular location at a particular time.
3. Watch for ongoing court action related to geolocation issues. In January 2012 the US Supreme Court ruled on the legality of tracking devices in a criminal action. The court ruled it was a warrantless search in violation of the 4th Amendment. There is not a direct connection for employers, but it gives an idea of how the Court views the issue.
4. State courts have also weighed into the matter. Just before the Supreme Courtdecision, a New York court held that installing a GPS device in a public employee’s personal vehicle to investigate misconduct during working hours was reasonable and lawful, under the circumstances.
5. Similarly, a New Jersey state court held last year that a private investigator did not unlawfully invade the plaintiff’s privacy by placing a GPS device on the plaintiff’s personal car. The New Jersey court reasoned there was no invasion of privacy because the plaintiff did not allege travel to any secluded or private areas where there might be an expectation of privacy.

Further legislation and legal challenges will likely evolve as the technology is used more widely. Be ready--look at how your company can benefit and what policies you need to have in place to use these technologies.
This article originally appeared in the October 2013 edition of Paytech Magazine, the American Payroll Association's membership magazine. The American Payroll Association (APA), www.americanpayroll.org, is the nation's leader in payroll education, publications, and training. This nonprofit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more than 22,000 members, APA is the industry's highly respected and collective voice in Washington, D.C. Get more information at www.americanpayroll.org.