Punching out after you’ve completed a hard day’s work is one of the best feelings in the world. If you’ve ever had to punch in and out for a job, then you know how crucial online time clock software is for businesses of all sizes. Like with most modern technology, time clock solutions have changed dramatically through the years, from paper timesheets to biometric solutions, and everything in between.
Punching out one last time before the weekend is a gleeful experience, but trying to remember to do it every day through the workweek can be a hassle. Not to mention, it can make employees feel as though they are being watched. It’s a continual race to beat the clock to punch in upon arrival, or as employees are rushing back from a break that went too long.
While the process of punching in and out doesn’t allow for much flexibility, it ensures that employees are getting paid accurately for their hours worked. Additionally, it guarantees that business owners comply with Department of Labor regulations.
Who defines federal time tracking standards?
The FLSA, or Fair Labor Standards Act, is a federal labor law that covers minimum wage laws, overtime rules, child labor laws, and the equal pay act. The FLSA requires nonexempt employees to be compensated at time and a half for hours worked over 40 hours in a workweek.
Some medical and government employees may have different thresholds. Keeping accurate nonexempt employee hours through a cloud-based time clock ensures any overtime worked is captured – resulting in the employee being paid the correct amount.
Exempt vs. Nonexempt employees
It’s crucial to know the difference between exempt and nonexempt employees. The two terms refer to whether the employee is exempt or nonexempt from FLSA rules. Exempt employees might be paid a salary rather than an hourly wage. Examples of exempt employees include executives, supervisors, professionals, or outside sales positions. An employee’s salary is also taken into consideration when determining whether they are exempt or not.
Businesses may require nonexempt employees to punch in and out to make sure they are being paid fairly. The records produced by an online time clock can be used to determine if any labor laws were violated in the event of an audit.
It’s important to note that the FLSA does not have a rule in place that restricts businesses from making exempt employees punch in or out.
Common issues with manual timesheet management
It is a common misconception that the only cost an employer incurs when manually managing timesheets is the cost of paper. However, many other hidden costs can quickly add up every week.
Whether done intentionally or unintentionally, many employees record the wrong hours when filling out time cards. If you require them to fill out time cards at the end of the week, it can be challenging to remember the exact time they worked every day. If they are not able to remember their hours, why would they purposefully mark themselves late?
This can also apply to the end of the day if an employee leaves early to take care of personal business. More than likely, the employee recorded their time as a perfect 8:00 am to 5:00 pm shift to add up to the standard 40-hour workweek. A few minutes here and there can quickly add up to an hour or more each pay period for every single employee. That is a considerable amount of money wasted.
Everyone makes a mistake from time to time. Even an employee who adds up their time card information or the HR person who is responsible for employee hours. Mistakes are so common that the American Payroll Association estimates errors account for up to 8% of payroll.
That error rate doesn’t factor in the amount of money lost by having to process employee time card information manually. Besides saving time and money, online timesheet software can help small businesses ensure they comply with FLSA standards.
How an online time clock can help with compliance
The two most important reasons why small businesses need time clock software are compliance and accountability. According to a survey done, approximately 40% of employees commit time theft. When combined with the rise of wage-and-hour violations, accurately tracking employees’ work hours is more important than ever.
Here are four common compliance issues and how they can be avoided:
1. Employees working off the clock
When an employee gets to work early or stays late to perform tasks, this is considered off the clock. The FLSA has put into place strict overtime rules that are extremely important to follow. Not keeping accurate records of employees’ hours worked can result in legal action for unpaid hours.
Such issues can be easily avoided by implementing a precise time and attendance policy. Employees should understand that if they can work overtime or not by referencing your employee handbook.
2. Rounding of hours worked
Per the Department of Labor, it is acceptable for businesses to round employees times. For example, if an employee punches in at 7:45 am and punches out at 4:55 pm, the system can automatically round the punches to the required eight hours from 8:00 am to 5:00 pm. This is considered neutral rounding because it can benefit both the employee and the employer.
Punch rounding also means that if an employee were to punch in at 8:05 am and leave at 4:55 pm, they would still be paid for a full eight hours. Punch rounding needs to be consistent for all employees. Business owners can face charges when rounding punches only in favor of their business.
3. Making improper time card edits
Employees are inevitably going to forget to punch in or out from time to time. If an employee forgets to punch time, it is legal for their employer to go and fix their time card information for them.
However, a disgruntled employee could claim that their employer was editing their time card information to reduce the number of hours they worked or to avoid overtime pay. When these types of allegations are brought forth, the deck is typically stacked in the employee’s favor.
When making edits of any kind to an employee’s time card, it is crucial to document everything accurately. This way, you can quickly check why an edit was made to an employee’s time card to prove that it was justified.
4. Time card retrieval
Employers need to make sure that they keep employee records on file for a minimum of three to four years. This is crucial in the event your business is audited and needs to pull records, fast.
Most time clock systems keep employee records for the lifetime of an account, and they’re able to be accessed within a matter of seconds. In addition, these solutions keep an audit trail of any changes that were made to punches, including who made them and when.
The daunting task of keeping employee time tracking records can be simplified by implementing online time clock software. No more having to rummage through old records, hoping to find the correct paperwork. By enlisting modern time clock technology, the time you save from no longer having to manually manage time or attendance can be better spent on developing your business in other ways.
Goodbye, manual timesheets!
If you’re a small business owner, spend some time thinking about your current process for handling employee time and attendance. How much time are you consuming managing timesheets or tracking down employees to confirm their hours worked?
When removing these tasks from your work schedule, the time you gain can be spent focusing on more critical aspects of your business, such as growth or improving sales. An online time clock solution can help you gain back time and money that you have been wasting for so many years.