6 Top Time Clock Rules for Hourly Employees

As an employer, you have many responsibilities but perhaps the most important one is complying with government rules and regulations. Recently, the time clock rules for hourly employees have changed and you need to make sure that you  comply with the Fair Labor Standards Act (FLSA). You need to be compliant in recording work hours, breaks, overtime and calculating wages for hourly employees.

The Department of Labor (DOL) is very strict about enforcing time clock rules. If you break these rules,  your company can be penalized with substantial fines for every lapse. The best way to ensure that you fulfill federal and state time clock rules is to use a good time tracking software system.  Ensure that the system tracks employees clocking in and out at the beginning and end of their workday. And lets them check in and out of specific jobs/projects.

Hourly Vs Salaried Employees

When understanding the FLSA rules, the most critical thing is the difference between salaried and hourly employees.

A salaried employee receives pay based on an annual sum or salary. As the employer, you decide the pay period – weekly, bi-weekly or monthly. A salaried employee is not obligated to complete a time sheet, though you may use one for project management or other tracking purposes. The salaried employee’s pay is based on the salary as a whole, rather than on the actual hours worked. So, if a salaried employee works a little over or under the normal 40-hour work week, the employer doesn’t need to keep track of their work hours.

An hourly employee, gets paid by the hour for the number of hours that they worked. As the employer, you decide how many hours your hourly employee must work. Some US states and cities have authorized predictive scheduling laws that mandate that hourly employees be given a specified  amount of notice of the hours they need to work.

An hourly worker is obligated to record their working hours through a timesheet or timecard system that the employer must verify.

Time Clock rules for Hourly Employees

To help you with your FLSA obligations with hourly employees, we reviewed the important rules that you need to keep in mind. These rules are for your hourly employees clocking in and out and tracking their work hours. Here are the top 6:

  • Time tracking system
  • Reported Hours Rounding
  • Maintaining time sheet records
  • Clocking in and out
  • Confirming hours
  • Clarifying time tracking policies

Time Tracking System

The FLSA does not obligate you to use any specific kind of time tracking system.

Mobile and web time tracking
Mobile, web & Salesforce time tracking

You are free to choose any type of system to track employee time as long as it is accurate. It’s important that the system that you use tracks actual hours worked including any breaks.

dftly’s Time Tracker app is used by many businesses to track time for individual employees and teams. It works on mobile devices, on web pages and within Salesforce, with all time tracking data securely inside Salesforce, regardless of what device it was recorded on. Click here to see how your employees can record their time easily and accurately, wherever they may be working.

Rounding work hours.

The FLSA allows you to round your employees’ reported time to the nearest specified increment. You are permitted to round your employees’ time up or down. For example, if you are rounding off in 10-minute intervals and your employee finishes work at 5:16 p.m., the time should be rounded up to 5:20 p.m.

You need to round up and down fairly. If you are always rounding down (where minutes are deducted), you may be breaking overtime and minimum wage laws.

Make sure that your time tracking system automatically rounds up or down to ensure accuracy and fairness. If the rounding up has caused your employees to be entitled to overtime, then you are obligated to pay that overtime, based on the overtime laws for your state/city.

Maintaining time sheet records

Employers are required to keep time cards (or other records) that demonstrate how your hourly employees wages were calculated for a period of at least two years. The two-year period is required by the US Department of Labor and you are required to provide access to the Wage and Hour Division access to inspect your records when necessary. So make sure that your time tracking software can store timesheet records for as long as necessary. With the Time Tracker, since all records are stored securely in Salesforce, you can always maintain time records for the necessary time-frames.

Clocking in and out

As the employer, you can decide whether your hourly employees are allowed to clock in early or clock out late. However, it should only be a few minutes and not hours. With the Time Tracker, you can easily add a limit on clocking in early and clocking out late. In addition, you can configure the Time Tracker to automatically log out or check out an employee after a certain number of hours or minutes for mandatory break times.

Confirming hours

Your hourly workers should have the opportunity to confirm their hours at the

Employees verify worked hours
Employees verify worked hours

end of every pay period. Although a good time tracking system would have recorded the work time accurately, your hourly employees should be able to review and verify their hours,

Your time tracking system should give you or a designated supervisor/manager with the functionality to approve time cards. In addition, you or the manager should receive emails notifications if there are any anomalies in the time cards.

Clarifying time tracking policies

Use photos to avoid buddy punching
Use photos to avoid buddy punching

As the employer, you must inform all hourly employees of the policies and procedures regarding your time clock rules. We suggest that you include it as part of your employee handbook and provide training on how to use the time tracking system. Policies that should be explained include:

  • What happens if employees are caught tampering, or attempting to tamper with the time tracking system
  • The consequences if employees are caught trying to commit time theft
  • What happens if employees are caught buddy punching (trying to clock in and out for their colleagues).

Make the right choice for your business

Given the importance of adhering to time clock rules, it may be impossible to adhere to state and federal requirements, with just manual time cards. Investing in a good, accurate time tracking software system is the right choice for most businesses. It’s not just about potential legal and compliance problems, but you could be losing money on payroll, if you are not correctly calculating work hours with overtime and rounding.

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Time tracking in Salesforce

Two years ago, we started down the route of time tracking on mobile devices for field and remote workers. All data from the mobile devices synced back into Salesforce in near real-time. Our goal was to give field workers the ability to get their work times into Salesforce on a mobile. We did build a simple way to track time automatically within Salesforce, but it was quite limited in functionality.

From our market research, we saw that there was a need for time tracking data to be synced to Salesforce. Since invoicing, project management and payroll were all within Salesforce, that work hours should be in Salesforce too made sense. PSA apps, ERP apps… all included time tracking as a part of their functionality. And those apps tracked work time for employees who worked within Salesforce. So, we decided that we would not play in that space – at the time.

Mobile and web apps

Mobile Time Tracker Clock out
Mobile Time Tracker Clock out

Our initial focus was on the mobile space where field workers and remote workers could track their work times. Our goal was to enable workers to track time easily and with little fuss on their familiar phones. Soon after, based on customer requests, we rolled out a Web-based Time Tracker. This was meant for workers who were not comfortable using mobile apps. The one big feature that we added in the Web version was the ability for users to enter time after the fact. This enabled workers to enter their time at the end of the day. Soon we rolled out the capability to enter multiple lines on a timesheet. Now, people who worked on multiple jobs during the day could enter a full timesheet once a day or week.

Time sheet entries on mobile, web or in Salesforce
Timesheet entries on mobile and web

With more customer requests, we added more functionality to both the Web and the mobile apps. We introduced configurable fields that could be displayed on both the mobile and on web apps. A new Team time tracking app on the mobile lets a single Team Lead check her entire team in. We updated the mobile app to allow configurable geo-tracking and photographs. This feature allowed us to minimize buddy punching. We introduced addresses that could be opened in Google/Apple maps to help field people find their next job-site. On the web app, we added an Approval mechanism for timesheets. Now managers and supervisors can approve/reject time entries for team members.

Over a year and a half, both the mobile app and the web apps grew with more functionality. But we did not do much on the Salesforce time tracking functionality.

Time Tracking in Salesforce

Over this calendar year, though, we’ve seen a renewed interest in time tracking inside Salesforce. To the point where now, over 60% of our leads are looking for Time Tracking within Salesforce.

The May 2019 EU Court of Justice ruling and the Fair Labor Standards Act (FLSA) requirements have pushed time tracking to center stage. Any business that has employees is now affected by regulatory compliance for time worked, overtime calculation and break time compliance. And that has pushed interest in time tracking within Salesforce.

Time sheet entry in Salesforce

Luckily for us, because of our Mobile app, we had a lot of functionality within Salesforce already. The objects themselves, reports,  dashboards – all these existed. We have now added a number of other functions that make life easier with Salesforce. Some examples:

  • A Lightning component that can be added as a Time Tracker pop-up from the Salesforce utility bar, to track time against ANY object, including the one that the user is currently working on.
  • A multi-check in time tracking option that helps enter their complete timesheet for a day or a week at a time, after-the-fact.
  • A Summary Timesheet page that helps users within Salesforce select a date and add/see all the time entries for that day, so users can make sure they’ve recorded all their work for a given date.

Overall, we now have one of the strongest offerings for time tracking, be it on the mobile, on the Web or within Salesforce. And the best part is that you could have a combination of users, some using our mobile app, some on the web and others inside Salesforce. Regardless of where the time tracking happens, Salesforce is the single repository of all time tracking data. So integration with payroll, invoicing and ERP systems becomes that much easier.

We are thrilled to say now that we are the Timekeepers for Salesforce!

EU time tracking ruling: what it means for employees and employers

EU FlagThe Court of Justice of the European Union (ECJ) ruled last month that the member countries must establish detailed methods of tracking the hourly work of employees, so that they can be properly compensated for time worked.

The ruling stems from a lawsuit by the Federación de Servicios de Comisiones Obreras (CCOO), a Spanish trade union, against the Spanish subsidiary of Deutsche Bank. The main issues in question related to calculating overtime hours – 54% of which goes unrecorded in Spain – and protecting obligatory rest.  “Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured,” the court said in its ruling.

The ECJ ruling is explicitly intended to protect the worker against potential workplace abuses. It is an effort to enforce the European Working Time Directive, which restricts employers from making employees work more than 48 hours a week, and grants people at least 11 consecutive hours of rest every day.

What the ECJ ruling means

The ECJ ruling extends to all companies operating in the EU. The ruling does not specify any guidelines for how employers should record work hours for their employees. In most cases, companies will need a clock-in/clock-out system that would allow them to monitor when employees start and end work, and when people have breaks. Employers will need to know employees’ exact work hours.

At first sight, this may seem cumbersome and backward. But given the technology available today, this could actually be a good idea, for both employers and employees. The “punch clock” has evolved, and businesses and employees don’t have to sacrifice contemporary technical flexibility for exact timekeeping. Modern time and attendance tracking software, often on the cloud, work on mobile phones. Clocking in and out is a matter of a tap on your smartphone screen or on a web page. So even if you are checking emails at home or taking a call from your boss, tracking that time isn’t really an inconvenience. Many of the software systems are priced such that small businesses can afford them. And most provide great analytical tools.

For employees

From an employee standpoint, there’s definitely a lot to be excited about.

Mobile and web time tracking
Mobile and web time tracking

Accurate time tracking provides irrefutable, objective proof against unlawful overtime. Time tracking thus becomes a tool towards building fairer, more accountable workplaces that help protect employee safety and health.

Moving beyond just clocking in and out, good time tracking can detail the time that employees spend on different tasks, when they take breaks and how long they last. It can help document off-site and off-hours work, as well as work-related travel, all of which are frequently overlooked. Basically, it gives employees full visibility into their work schedules – allowing them to address unhealthy workloads and the associated stress, anxiety and exhaustion that come with it.

For employers

Analyze employee time
Time Tracking reports

Companies can use time tracking to track employee working hours. It makes payroll much more accurate. Billing customers for work done is now much clearer and transparent and all hours worked can now be billed. The time tracking data collected is a great source of information on project budgets, project status, progress of works, employee productivity and many other aspects that are crucial for business success. For managers, it may make sense to combine data on the quantity and task breakdown of hours worked by employees with productivity information. It may turn out, for example, that a company would be better off with more workers keeping shorter hours than with an overworked team that’s less effective because of stress and exhaustion.

Conclusion

Time tracking doesn’t have to be tedious and cumbersome. With the right approach, you can make it an integral part of your business. Most makers of time tracking software tell customers that it’s vital to make it’s use mandatory to get people into the habit of tracking time, and that the data must be checked regularly to weed out abuses and negligence. If EU companies take the ECJ’s ruling seriously and apply it properly, it could do a world of good to their employees and their economies.

 

Moving to mobile time tracking: Are you prepared?

So you are transitioning from paper time sheets to a slick new mobile time tracking system with all the bells and whistles. You’re excited about the new technology and you know the ROI of automated time tracking. But after years of using a manual time tracking system, you’re definitely apprehensive about the move to a mobile time tracking system. And if you are anxious, then consider what your employees would be feeling.

The transition from paper to mobile, can often seem confusing and overwhelming at first. But regardless of your company size or goals, automating your time and attendance process, will simplify procedures, eliminate errors and provide savings, overall.

But like with anything new, the transition to an automated time and attendance system needs planning and preparation. So here are some tips to help you implement the new technology and get it running smoothly.

  • Get your team on board
Select project
Select project

First things first: it’s critical to make sure that you have the right people on board to support a big change like this. New processes only work, when there is buy-in at all levels. Make sure that you sit down with team leads and influencers and explain why mobile time tracking will benefit them and the business as a whole. Get a couple of the enthusiasts to be the champions for the software. That way, the rest of your team will have someone to turn to if they need help. You might even want to offer some short-term incentives to get people to adopt the new technology quickly.

  • Explain the goal of the time tracking

First, start by asking yourself why you want to set up the time sheets. Perhaps, you spend too much time on payroll and there are too many errors in the process. Maybe your clients need more accurate time records with your billing. Perhaps you need to balance your employee workloads better.

Whatever your reasons, communicate it to your employees. Do you want to make sure that everyone is carrying their own weight? Do you want to estimate project times better for their next projects? Explain it to your employees in terms of the personal benefits that they will gain from it. Smoother distribution of efforts, better time frames on projects, faster payroll with fewer errors.

  • Choose the right level of detail

If you start tracking time without the right level of precision, you may not benefit from the new system. But start tracking too many details, and you’ll end up overwhelming your employees. So the right level of detail for time tracking must be neither too vague nor too precise. So what does that mean, exactly? We recommend that you go in stages. Start your time tracking process at a “project” level, so that you can figure out the hours spent on a project, without over-burdening your employees.

Get your team used to the  software before heading into more detailed tracking. Later on, you may want to include what tasks/deliverables people worked on, so you can get a more detailed breakdown of your projects. But remember that the more you need to track, the harder it is for your employees. So maintain a trade-off between the detail that you want and the tedium for your employees.

  • Select the activities you’re going to track
Time worked by Employee
Time worked by Employee

Once you’ve selected the level of detail, decide on the projects and activities for which you want to track time. Then start adding in more operational activities like maintenance and support that may not necessarily be tied in to specific projects. Then think of adding in administrative tasks such as holidays, time-off and training.  If you don’t need that level of detail, simply create an activity or project called “Other” to which people can add time.

  • Set up a test run / pilot

Now, you need to make sure that you and your team get a better understanding of how to incorporate mobile time tracking into their day-to-day routine.

  • Make sure that your reference data such as Projects, Users, Tasks are all set up correctly.
  • Deploy the software in manageable chunks.If you have a very large number of employees, you may want to start with one team and then deploy it to others
  • Schedule a training session for your employees. Make sure that someone is available to answer any questions that they may have.

Depending on your employee mix (age, tech familiarity), the time to get comfortable with the new technology will vary. Give them time to ease into the new technology.

  • Run in parallel

After you and your team have tried out the new software and worked out the kinks, formalize the new time tracking process. Put in place whatever rules you want for the process.

Based on how the initial roll-out goes, you may want to run the new mobile time tracking in parallel with the old paper-based time sheets for a few weeks. That way you’ll have a backup as you and the team get up to speed with the new system.

But make sure that you give everyone a firm end date for the old system and ensure that you stick with the date.

The first step, of course, is to find a mobile time tracking system that works for you!