There is so much to take care of when it comes to handling employees’ timesheets and payroll. It’s easy to miss important details in the sea of business management tasks.
One of the biggest issues that companies face in this respect is employees not clocking in or out for their shifts.
Whether it happens by mistake or is done on purpose, this can lead to inaccurate payments.
This can go both ways: either hurting your business through time theft, or employees not receiving fair compensation for hours worked. Either case is undesirable and has negative consequences, so it’s wise to avoid them altogether.
Knowing the legal framework and the best practices for clocking in is essential for protecting your business interests. That’s how you can also ensure that you adhere to the law and provide due payment to your staff.
In the sections below, you can get acquainted with the most common issues with time-clocking, the legal framework, and how you can create the best fitting system for your team.
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Why employees not clocking in or out is an issue for your business
One of the most common problems with recording time for employees is not having the correct information in timesheets. It affects both your business and your staff, as the hours are then sent off for payroll.
The reasons for forgetting to clock out can also be diverse.
Employees need a reminder to clock in and out
The most common one is that employees simply forget. Especially if they’re changing job sites.
This means they would need to be reminded of its importance and motivated to get it right.
Or, you find a way to automate the process so it’s one less thing for your team to worry about. The ease of use of your time clock system can have an impact on how often this happens.
Unintentional or intentional time theft
In some cases, if an employee doesn’t clock in or out, it can be an instance of time theft.
Time theft can take many forms, but the most common are:
- Intentionally leaving the time clock running in order to receive payment for hours they didn’t work
- Buddy punching
- Covering up late check-ins/early check-outs
- Prolonging breaks
It may also have to do with overtime pay, which happens when a team member wants to reach the limit to receive higher pay.
Whatever the exact reason may be, it is important that you minimize the margin of error in the recording of work hours. This is essential for correct payroll handling.
You also have to consider legal compliance. Not paying your staff for hours they have worked can lead to serious problems, including lawsuits.
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The legal framework for time clocking
As explained above, the way employees handle their timesheets is critical for accuracy in estimating and budgeting, as well as for your business meeting the legal requirements on the federal and state level.
In order to safeguard your company’s interests, as well as ensure fair pay to your staff, you need to be aware of the legal requirements for time tracking.
Most importantly, the FLSA defines what is considered as hours worked, and it’s worth understanding the details in full. You may also find it useful to get acquainted with the time clock rules for hourly employees.
According to federal law, and often confirmed in state laws, the employer should take care of the correct time logging of the staff’s worked hours.
The guiding principle in this process should be to prioritize employees’ interests. Thus, your time clocking policy can never be solely in your benefit as the employer.
It should be either balanced, or it should give preference to the employee. Failing to follow this can result in a wage and hour grievance against your business.
At the same time, you should also bear in mind that employees not clocking in or out is mostly an issue for you as the employer.
The FLSA clearly states that even if a staff member has not logged their hours, you need to pay them for all hours worked. You cannot withhold the due payment if they haven’t clocked in or out.
Thus, under the law, the responsibility for precise time logging is yours. In addition, you have to keep all payroll records for at least three years.
How to make sure employees clock in and out on time
It is up to you as an employer to devise the best system to ensure accurate timesheets. It’s worth having a policy on time-clocking, and then finding ways to motivate your employees to follow it.
1. Set up a company policy on time tracking
The first important step that you need to take in order to ensure correct clocking in and out is to create a time logging policy for your business.
This should be a basic document that outlines the rules that you and all employees have to follow day-to-day. By having the policy spelled out, you can prevent potential lawsuits for unfair work practices.
You should clearly state that using the time clock is a must for all staff members. It’s also a good idea to explain why it is in the favor of employees to clock in and out accurately.
The policy is also a good place to include your rules regarding unpaid breaks and lunches. You should note down the usual working hours, as well as the breaks that employees need to take during the day. This is needed in order to avoid employees working in the previewed breaks, which can lead to overworking, time theft, or unnecessary overtime.
It’s worth detailing in your time clocking rules the procedure that staff members have to follow in case they forgot to record their working hours. Some apps offer idle time reminders so that your team is prompted to stop the clock if they walk away for a while. This would depend on the time clocking system, as well as the team structure, for example, if there are managers to approve the changes.
You may also want to set up a warning system for employees who fail to follow the time clocking rules. It doesn’t need to be super strict from the start. Businesses usually introduce a process in which staff members receive verbal and/or written notices after a few instances.
After a certain number of warnings, it’s considered that an employee who doesn’t follow the clocking rules is doing so intentionally. In such cases, you may set specific penalties such as suspension and probation, or even terminate their contract.
Remember to check your local laws for how best to handle this as what you can do varies state-to-state.
Typically, the time clocking policy should also detail any timesheet rounding practices that you use. This is a good way to ensure full transparency with your staff, so that you can avoid misunderstandings and the ensuing legal problems that may come up.
2. Raise awareness about the policy and follow through
Having a written policy is necessary.
However, employees actually adhering to it is another matter. For this, you will need to speak with your staff in person. You need to inform them about your time clocking rules, as well as the consequences of not following them.
Besides providing the information in a clear and concise way, you should also think about ways to motivate people to get timesheets right. Employees should grasp the idea that correct time logging is the basis for correct payroll.
Thus, it’s important for them to understand that not following protocol can jeopardize their own payments, among other issues.
Go further than just highlighting the potential problems and create incentives for staff members to log time precisely.
The more connected they feel with your company’s internal policies, the more likely they are to follow them.
3. Use the right time clocking app
One of the biggest issues for employees when it comes to time clocking is the method that a company enforces.
Filling out paper timesheets after the fact or clocking in with a physical time clock are still commonly held practices.
However, it often requires timesheet adjustments that managers and employees have to take care of afterward. Time tracking software simplifies clocking in and out for staff, and makes payroll a breeze.
With Hubstaff’s time tracking apps for desktop, web, and mobile, you can get accurate time logging from any device.
Staff members can either start a timer at the beginning of the workday, or it can happen automatically based on location. Managers can create geofenced job sites that auto-start and stop the timer based on location.
When your team arrives at a set location, the app will start tracking or issue a notification to start. These settings are customizable by user, making it even easier to adjust to what works best.
They can easily account for unpaid breaks and lunches by stopping the timer in one click. Hubstaff also offers activity monitoring, so you can unobtrusively verify if employees are actually performing work during the logged hours.
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Get started with your own system for employee time clocking
Now that you know the importance of employees clocking in and out accurately, it’s time to start creating the most appropriate time logging system.
Set up a policy, inform your employees, create initiatives for them to follow the rules, and choose the best time clocking software.
Important Notice: The information in this article is general in nature and you should consider whether the information is appropriate to your needs. Legal and other matters referred to in this article are of a general nature only and are based on Hubstaff’s interpretation of laws existing at the time and should not be relied on in place of professional advice. Hubstaff is not responsible for the content of any site owned by a third party that may be linked to this article and no warranty is made by us concerning the suitability, accuracy or timeliness of the content of any site that may be linked to this article. Hubstaff disclaims all liability (except for any liability which by law cannot be excluded) for any error, inaccuracy, or omission from the information contained in this article and any loss or damage suffered by any person directly or indirectly through relying on this information.