Employers must keep accurate records of non-exempt employees' work hours. This seemingly straightforward process can become complex when employees punch-in early or leave late, travel for business, participate in company trainings, and use mobile devices to remain connected to work after-hours. Here are some do's and don'ts to help you manage your timekeeping responsibilities.
- Use an accurate timekeeping system. Employers may choose their preferred timekeeping method (such as time clocks, timesheets, or badge readers), provided it is complete and accurate. While it is a best practice to track employees' time to the minute worked, the Fair Labor Standards Act (FLSA) permits employers to round employees' hours for uncertainty or inefficiency (to a maximum of 15 minutes). Your time rounding policy must be applied fairly and cannot consistently round in the company's favor or result in the failure to count all the time employees have actually worked. For example, if an employer rounds to the nearest 15 minutes, they may round down employee time from one to seven minutes, but they must round up time from eight to fourteen minutes. Note: Some states place limits on time rounding. Check all applicable laws and consider your timekeeping system before implementing a time rounding policy.
- Require employees to record all time worked. Time spent using technology outside of the office to respond to work email, access the company network, check phone messages, or perform other work tasks is generally considered compensable work time. Make sure non-exempt employees know that that they must report all time spent working, including time they spend checking work email outside of work hours. If employees can't use your regular timekeeping system to record after-hours work, instruct them on how to promptly and accurately report these hours.
- Record training and travel time. Under the FLSA and many state laws, employers must pay employees not only for time actually spent working, but also for certain nonproductive time, such as time spent in training or traveling. For example, when an employee travels overnight for work, the employee must be paid for all time that cuts across their regular work hours, regardless of whether the travel occurs on their regular work day. If an employee's regular work hours are 8 a.m. to 5 p.m., Monday through Friday, you must pay the employee for overnight business travel that takes place from 8 a.m. to 5 p.m. even if it occurs on Saturday or Sunday. Make sure you understand the rules on compensable training and travel time and instruct employees to record their time accordingly.
- Consider rest breaks "work time." Under the FLSA, if you provide a rest break (any period lasting 20 minutes or less that the employee is allowed to spend away from work), it must be paid. Therefore, make sure employees do not punch out for breaks lasting 20 minutes or less. The duration of the break is generally the sole factor used when determining whether pay is required, not the reason for the break.
- Require employees to verify hours worked. At the end of each pay period, require employees to review their time records and verify that they are accurate. This can help you make corrections before running payroll and document that the employee has confirmed the accuracy of their time records.
- Withhold pay if employees fail to submit/sign timesheet. Under the FLSA and many state laws, an employer must pay employees for all hours worked on the next regularly scheduled payday, regardless of whether the employee adhered to the company's timekeeping procedures. If an employee fails to submit or sign a timesheet, ask the employee and their supervisor to immediately provide/confirm the hours worked and pay the employee accordingly.
- Permit employees to work off-the-clock. Employers can't ask or allow non-exempt employees to work "off-the-clock." Make sure you have a policy that expressly prohibits off-the-clock work and have controls in place to prevent it.
- Withhold pay for 'unauthorized' work time. Employers may have a policy that requires employees to get permission before working overtime (or before punching in early/punching out late). However, employers must pay non-exempt employees for all time worked, regardless of whether it was authorized in advance. If employees violate the policy, the employer may subject them to disciplinary action for failing to get approval in advance, but in no case may the employer withhold pay.
- Make automatic deductions for meal periods. It's a best practice to require employees to clock out and back in for their meal periods. This can help ensure that employees are paid for missed lunch breaks and account for times when employees return from lunch late. Time records should accurately reflect that the employee took a meal period, how long the meal period lasted, and the actual hours worked. In addition, some states have meal period recordkeeping requirements, and automatic deductions may violate these requirements. Check your state law for compliance.
- Forget to address interrupted meal periods. Under the FLSA, for a meal period to be unpaid, it must generally be at least 30 minutes without interruption and the employee must be fully relieved of all duties for the purpose of eating regular meals (some states have additional requirements). If the employee's meal is interrupted (including requiring the employee to be available to work if needed during their meal period), the employee should either be paid for the full meal period or be allowed to continue their meal period for a full 30 minutes following the interruption. Instruct employees to report interrupted lunch breaks so that they can be paid for the time.
- Neglect recordkeeping responsibilities. The FLSA requires employers to keep time cards and other records on which wage calculations are based for at least two years. Employers must also keep payroll records, including hours worked each day and total hours worked each workweek, for at least three years. Records required for federal tax purposes must be kept for at least four years. Check your state law for any additional recordkeeping requirements.
Develop policies and procedures to ensure that you keep accurate time records for all non-exempt employees and that they're paid for all time spent working.