Analog punch clocks are all but relics of a forgotten time as most private employers now use some sort of digital timekeeping option to track employee hours. Many of those digital timekeeping tools are provided free with your office’s chosen management software, which is a cheap and easy fix, so long as that software is working how you need it to.
But what if the timekeeping software you are using is not working how you think it is? What if it’s actually allowing you to perform actions that are unlawful, or that could otherwise land your practice in hot water with the Department of Labor (DOL).
Unfortunately, most free timekeeping options are not robust enough to provide the full range of functions needed by most business owners and managers, and many even boast “features” that actually operate outside the law. We’ve compiled this list of tasks that your timekeeping system should be able to perform for your office in order to help you determine if the system you’re using is helping solve problems for your practice, or if it’s just a matter of time before it creates new ones.
1) Prevent you from making illegal ‘judgment calls.’
Some timekeeping systems give employers the option to select if an employee is paid hourly or on salary, and then give the option to determine if an employee is eligible for overtime. Those systems never ask if an employee should be classified as “exempt” or “non-exempt” from the Fair Labor Standards Act (FLSA).
This series of choices actually sets employers up to make one of the most common types of employee classification mistakes by equating salary payments with FLSA exemption. It also could allow employers to label hourly employees as “exempt” from overtime payments, which they most certainly are not (there are some exceptions for doctors and lawyers, but that’s it).
Some third party timekeeping tools also include the ability to set your own overtime rate, which is only legal if you set a rate that is greater than the state and federal requirements, but we rarely (if ever) see that happen.
2) Make sure your employees are paid for all hours worked.
It is against the law to clock your non-exempt employees out while they are still working. And preventing employees from clocking in early can create legal problems for your business, as well.
That said, there was quite a bit of confusion in the halls of CEDR when at least one timekeeping service began advertising their platform’s ability to automatically clock employees out for lunch and other mandatory breaks.
Rather than illegally clocking your employees out while they are still performing the functions of their jobs, your timekeeping system should notify you if employees clock in too early, clock out late, or fail to clock out for mandatory breaks. Those notifications will not negate your responsibility to pay your employees for the time they spend working, but they can help you address employee clocking issues as they arise without putting your practice at risk of a DOL audit.
3) Account for the state in which you practice.
State and local employment laws differ so vastly that, if your timekeeping system hasn’t taken account of the state in which you live and work, there’s a good chance that it’s performing at least a handful of functions incorrectly for your practice.
State laws governing overtime payments, what has to happen with unused vacation at the end of the year and at separation, and, in some cases, extra pay for not getting a break or for being sent home early can be extremely specific, so don’t be surprised if your timekeeping system’s inability to apply those rules eventually gets you in trouble with your state DOL.
4) Track accrued time off, including vacation, sick time, PTO, and more.
If your timekeeping system is able to keep track of all of the hours an employee works, it should be pretty simple to program that system to monitor that employee’s time off as it accrues, right? Not always.
Only the most robust timekeeping systems can be programmed with the time off accrual policies specific to your company and your state and/or locality’s laws.
Setting a system up to add a certain number of vacation and/or sick hours based on the total number of hours an employee has worked can be complicated, which is probably why most basic timekeeping systems simply don’t offer time-off accrual as a function of the software.
5) Make time-off requests easy.
A timekeeping system that can track time off and help monitor your office schedule should also make it easy to use that time off.
If you still have to manually tally an employee’s available time off and cross check for competing requests by other employees whenever a new time-off a request comes in, then your timekeeping system simply isn’t working hard enough for you.
A complete timekeeping solution should allow you to view the total amount of time off an employee has used, how much time they have available in any particular category (vacation, sick time, paid time off, unpaid time off, etc.), how many people have made requests for a particular day, and should also make it easy to approve, deny, or modify those requests with just a few clicks.
6) Transfer some additional accountability to your employees.
When your employees can (and are required to) approve their timecards before payday, payroll mishaps become a thing of the past.
If your timekeeping system is not keeping records of your employees’ timecards which your employees can easily access and approve themselves, chances are good that paydays often lead to a string of questions and complaints from your team — complaints which then become your problem to fix.
By using a complete digital timekeeping solution for your office, you can transfer a sizeable portion of the payroll accountability process to your employees. Not only will this help you to minimize backlash from angry employees after checks are issued, but it can also help to protect you if an ex-employee ever tries to file a wage and hour complaint against your practice.
7) Integrate with your chosen payroll company.
What good is a digital timekeeping system if you still have to crunch the numbers manually at the end of every pay period?
A complete timekeeping solution should make it easy to pull specific reports that your payroll company can use to ensure that your payroll is accurate and on time, every time. Otherwise you may as well stick with that old analog clock you’ve got in storage.
Wondering if there’s a complete timekeeping solution out there that can do all of this and more? There is! Try the PTO & Time Tracking integration inside HR Vault free for 90 days!
Updated December 22, 2020; originally published April 3, 2019.