Learning how to track employee hours keeps you compliant and can also streamline your payroll process. But how do you know which time tracking method is right for your business? This article breaks down 4 main ways to track time and highlights 3 great time tracking apps.
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Tracking your employees’ working hours helps you pay accurate wages, protects you from time theft, and can even increase worker productivity. Plus, it helps reduce manual admin and labor costs and keeps you compliant with labor laws and regulations.
However, it can be tricky to understand how to track employee hours effectively and which method to use. Will pen and paper suffice? Or would a digital solution better suit your team?
This article breaks down 4 ways to track employee hours, why it’s important, the top do’s and don’ts of time tracking, and the 3 best time tracking apps on the market.
- Keeping accurate records of employee working hours is a federal requirement, so finding the right tracking method for your business helps you stay compliant.
- Time theft occurs when an employee overstates the hours they’ve worked, increasing your labor costs. Time tracking methods that include punching in and out on a time clock can help reduce this risk.
- Small businesses can track time using traditional methods like pen and paper or Excel spreadsheets. These are simple and low-cost but require significant admin work and are prone to human error.
- Use digital solutions, like time tracking apps, for the most effective time tracking. They save time, minimize manual labor, and can integrate employee timesheets directly into your payroll solution.
Why Should You Track Employee Time?
Tracking employee time brings huge benefits to businesses, from staying compliant to boosting productivity. Here’s why you should track your team’s hours.
Calculate payroll accurately
Tracking employee time is essential to calculating payroll accurately and paying employees fairly for hours worked. This is especially important for hourly workers, but it’s useful for salaried employees, too. For instance, you may need to invoice your clients for your employees’ billable time, which requires accurate time data.
When using digital time tracking solutions, you can also integrate your timesheet calculations with your payroll solution, further reducing the risk of errors.
The Department of Labor (DOL) requires businesses to have at least 2 years’ worth of workers’ time records under the Fair Labor Standards Act (FLSA) as proof of compliance with labor regulations. While deciding how to track employee hours is up to you, timekeeping records must be “complete and accurate.”
On top of this, you must comply with other federal and state labor laws relating to working hours and pay. Among these is overtime pay. You must compensate non-exempt workers at least 1.5 times their regular pay rate for any hours exceeding 40 hours/week.
Time tracking can help you comply with these and other regulations.
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Read our guide on compliant time tracking with time clock apps.
Avoid time theft
Some employees might overstate the number of hours they’ve worked, typically intentionally but sometimes accidentally. This practice, known as time theft, can increase labor costs while eroding trust in your workforce.
Tracking hours can help you reduce time theft and avoid these issues. Time clocks, for example, give you precise records of when employees start and finish work. Some digital solutions also allow you to verify workers’ locations or take screenshots on their work devices to discourage time theft.
🧠Did You Know?
Time theft affects businesses more than you might expect. As many as 75% of American companies are experiencing it, and one estimate places its productivity losses around $400 billion.
Tracking time helps workers see how much time they spend on certain tasks and projects. This, in turn, encourages them to resist procrastination and work more productively.
What’s more, your HR colleagues are more productive with time tracking. Having a quick, clear way to produce timesheets means less time spent figuring out employees’ hours through informal conversations.
4 Ways To Track Employee Time
It’s vital to understand how to keep track of employee hours. Thankfully, you have physical and digital options to choose from, with solutions for every budget. Before deciding, weigh each method’s pros and cons and consider which one is right for your team.
Let’s look at each option in detail.
Pen and paper
With the pen and paper method, your workers will log their start and end times manually.
To use this method, start by creating a timesheet with columns labeled “Employee name,” “Start time,” “End time,” “Break start time,” “Break end time,” and “Total hours.” Fill out each row with your employees’ names, and then use a copy of this table for each working day.
Ask your employees to fill out this timesheet at their job site. You could even ask them to add their signatures to their respective rows for extra accountability. Afterward, you collect the timesheets and calculate the total hours worked per day, week, and month for each employee.
Alternatively, you can have employees track their hours on their own. You’ll then collect their physical time entries and create and fill in a timesheet to calculate all employee hours. For this approach, you might provide employees with notebooks, for instance, to track their time.
The pen and paper method is simple and low-cost but has disadvantages. First, you can’t verify if your employees have worked all the hours they’ve claimed, leaving you vulnerable to time theft. Second, ink and paper are subject to the elements, so timesheets could get smudged, erased, or lost. In addition, with this method, your team must manage employee payroll calculations manually—increasing error risk, admin time, and HR costs.
Another option is to use digital spreadsheets. First, create a timesheet template in Excel or Google Sheets using the same column headers as you would for the pen and paper method. Then, create different timesheet files for different days, teams, and projects. Save these to a business cloud drive like Dropbox, and ask your staff to fill them in digitally daily or weekly.
The advantage of using digital spreadsheets is you can automate calculations like total hours worked, saving time and reducing error risk. Plus, time data is more secure within digital timesheets than paper ones.
On the downside, there’s the risk of time theft, the potential to accidentally modify table cells, and the admin costs of managing timesheet files.
There are 2 types of clocking-in machines you can choose from:
- Traditional punch card machines that “punch” holes or ink stamps onto employee cards to mark shift start and end times.
- Modern clocking-in machines, which are Wi-Fi-operated physical devices that digitally store employee time records.
When using traditional punch card machines, ensure they’re correctly set to the current date and time and that you’ve installed all necessary components, such as ink. You should give your staff punch cards and instruct them to insert their cards at the start and end of their shifts. Then, collect the cards and calculate the total time worked for each employee.
For digital devices, follow the manufacturer’s setup guidance, including setting the date and time and creating unique employee accounts. Depending on your device type, workers will clock in and out using unique sign-ins, PIN codes, or biometrics like fingerprints. These machines automatically add up hours.
Both machine types help reduce time theft, as employees must physically clock in and out to record their time, and involve less admin time than managing spreadsheets.
That said, clocking-in machines can cause delays at busy worksites if workers have to line up to sign in. It also increases manual payroll tasks when workers forget to punch in. Plus, workers can’t use physical clocking-in machines at client sites since the devices stay at your worksites.
Time tracking apps
Time tracking apps let your staff punch in and out and record their hours using a digital online time clock. The apps will then automatically convert employees’ time records to timesheets.
One way to use the software is to deploy it as a kiosk app on a shared device, like a tablet, at your job site. This effectively creates a physical clocking-in device. Another way is to give your workers individual access via a web browser or mobile app.
When an employee forgets to clock in, they can add a manual time entry from their account. Meanwhile, you’ll get a real-time overview of all hours worked and can approve timesheets instantly.
Some apps even let you create custom rules for breaks, overtime, and billable hours and automatically factor this information into employees’ time data.
The best platforms will also feature GPS tracking functionality, which records employees’ locations and can help you check whether they were in the right place when they clocked in.
Compared with other methods, including physical time clocks and timesheet software, this method involves little error risk and few manual tasks, saving time and money. In addition, tracking employee hours in real time can help you identify opportunities for increasing team productivity.
Do’s and Don’ts of Time Tracking
Implementing effective time tracking doesn’t start and stop with choosing the best method. You should also keep these important do’s and don’ts in mind.
- Communicate clear expectations with your team about start and end times, break lengths, and overtime limits. This ensures staff members don’t track time when they’re not supposed to.
- Train staff on how to keep track of employee hours—no matter which method you’re using. You can conduct this training in a group workshop, integrate it into your onboarding, or share it with staff in an instructional video.
- Minimize potential errors. For instance, you can protect spreadsheet cells in Excel to prevent employees from modifying formulas accidentally.
- Micromanage employees. Feeling “watched” can demotivate some workers, so try not to comment on their time tracking on a daily basis. Rather, provide gentle reminders about the basic rules when inconsistencies appear—like when an employee forgets to clock in and track their hours.
- Overlook signs that your current method isn’t working. Often, these will include employees struggling to track time or being less productive because of it. For instance, long lines of workers waiting to use your physical clocking-in machine could make employees late for shifts. In that case, consider switching to an app with a digital time clock.
- Ignore regulations, including state and federal employment laws. Ensure you understand all regulations you must comply with, and use your time tracking method to do this effectively. For example, accurately logging overtime hours with your timesheet software can ensure adherence to overtime laws.
3 Best Employee Time Tracking Apps
The best time tracking option for you will depend on factors like your company size, payroll needs, and overall budget. However, time tracking apps are by far the safest, most cost-efficient way to track employee hours.
I’ve listed my 3 favorite time tracking apps and their best features below.
You can also read our in-depth comparison to get a full overview of the best employee hour tracker apps.
Connecteam is my number-one favorite time tracking app.
Why I picked Connecteam: It lets your team clock in and out, request time off, and add overtime hours wherever they are. You can see everyone’s clock-in status in real time, receive notifications when workers enter overtime, and approve timesheets with a single touch.
Here’s a deeper dive into Connecteam’s top time tracking features.
One-touch time clock with GPS capabilities
With Connecteam, your workers can punch in and out with just a touch—whether on a mobile, desktop, or on-site kiosk app. I find it super useful that employees can categorize working hours using labels like job type, task, and client, which enables you to bill your clients according to total billable hours.
As a manager, you get a complete overview of who’s currently working, plus shift details like location, project, and tasks. Connecteam will automatically notify you when an employee is late for work or misses their shift. I also love that employees can get daily reminders to clock in.
However, what sets Connecteam’s time clock apart for me is its GPS location tracking and geofencing tools. You can verify workers’ on-the-clock locations and create virtual borders around job sites to ensure workers always clock in and out in the right places.
I find both the geofencing and the GPS tracking functionalities super helpful in verifying timesheet validity and minimizing time theft.
Automated timesheets you can review instantly
Connecteam instantly calculates the total hours worked for all employees, saving you a ton of time. Then, it automatically converts time clock records to timesheets. You can use these with one of Connecteam’s payroll software integrations or export them for use in another payroll system.
Your employees can request timesheet changes where necessary, and you give the final approval. Conveniently, Connecteam flags potential timesheet errors, like an unusually long shift, and you can fix these before using timesheets for payroll.
Break management tools that sync with the time clock
Connecteam’s break management features also make tracking and managing employee breaks a breeze. You can customize breaks to suit your needs—for example, by determining how long breaks are, whether they’re paid, and whether employees must submit break requests. You can even set break rules to comply with labor laws, including minimum meal break length requirements.
Workers can clock in and out of breaks easily from their mobile devices. I love the ability to track the exact location and timing of breaks, which is another defense against time theft.
With Connecteam, you get a clear view of your workers’ break patterns, so you can address any inconsistencies as they arise. This ensures that every break is accurately reflected in your time tracking and during payroll.
Overtime management to stay compliant
Connecteam’s overtime management features make it easy to record and track overtime hours in order to pay wages that comply with federal labor laws. For example, you can customize overtime rules based on time zones to comply with state-level laws. You can even set different overtime pay rates during holiday shifts.
Overtime features also help you lower costs. For instance, instant alerts when employees start overtime shifts give you the chance to decline these costly shifts when they aren’t needed or urgent. You can also avoid unnecessary overtime costs by setting an upper limit for overtime hours—and employees’ time clocks will stop automatically when they reach it.
What’s more, you can use Connecteam for more than just time tracking. The app lets you schedule effectively, store employee data, conduct onboarding and training, communicate with your team in real time, and more.
Toggl Track is an easy-to-use time tracker, part of Toggl’s larger software suite.
Why I picked Toggl Track: I appreciate that users can access it on desktops, browser extensions, and Android and iOS mobile apps. Its central feature is a time clock that tracks hours for specific projects and clients. You can also add time entries manually and edit past entries, which I find useful for when employees make errors or forget to clock in.
Toggl’s time clock can start automatically based on what program is currently in use. For example, opening up a Google Chrome window can trigger a clock-in, which can be helpful for tracking time spent on web-based projects.
Additionally, you can customize the timer to end automatically after a specified amount of time. This encourages workers to take regular breaks, which is known to increase productivity.
Clockify is a popular time tracking app available via web app, web browser, browser extension, and iOS and Android mobile apps.
Why I picked Clockify: The software lets your team members track their working hours while giving you an overview of employees’ current or last-known locations using GPS. I like that employees can clock in and out and categorize their hours according to projects, sub-projects, tasks, and clients. This is useful if you track client billable hours since you get insights into top-earning projects and employees.
In addition, you can check who’s present on job sites, and the GPS functionality works only when workers are clocked in. These features—plus the option to take screenshots on employees’ devices—are a solid way to decrease time theft.
Knowing how to keep track of employee hours helps you stay compliant, pay your staff the right wages, and more. Several methods exist—from pen and paper to digital timesheets to physical clocking-in machines—and each has benefits and drawbacks.
However, using time tracking software is the method that reduces the risk of errors, decreases administrative work, and minimizes the chance of time theft the most. These apps offer employees an easy way to clock in and out, can automate timesheet generation, include compliance-friendly overtime features, and more.
My top recommendation for time tracking software is Connecteam.