Employee time tracking involves tracking how much your employees work to ensure they’re paid correctly for that pay period. It is a type of record keeping.
If you work in a highly regulated or project-driven industry, you might consider separating the total time tracked vs. time tracked for a specific project or task. These are called ‘billable hours’ and are considered separately from the total time tracked.
Do All Employees Need Their Time Tracked?
It is good practice to track all your employees’ time to ensure you treat them equally. However, you are only legally obliged to track the time of your Fair Labour Standards Act (FLSA) non-exempt employees.
You should track all working hours of non-exempt employees and ensure you keep accurate records of their working hours. FLSA non exempt employees will need to be paid overtime at 1.5 times their usual hourly rate if they work over 40 hours per week.
FLSA exempt employees are not paid for overtime as they earn a salary instead of being paid per hour. No matter how many hours these employees work, they will not be eligible for overtime payments.
However, you should still track their working hours to ensure your exempt employees are not regularly working over 40 hours per week. This is considered to be the standard number of working hours that constitutes a full-time employee. However, there is no legal definition of how many working hours make up a full-time employee.
Why Is Time Tracking Important?
Time tracking confirms that your employees are paid appropriately for their work time. It also ensures that your business complies with the FLSA.
The FLSA dictates that your non-exempt employees cannot work over 40 hours per week without being paid overtime payments. Time tracking will help ensure your employees do not regularly exceed 40 hours per week, while helping you pay them fairly if and when they do.
Aside from legal reasons, tracking your employee’s time can have several benefits. These can include:
- Estimated budgets. With an estimate of how long projects or tasks will take your team, you can easily forecast staffing expenses and get an estimated time frame for completion.
- Reduced burnout. Tracking your employee’s working times will help you ensure that employees don’t work an excess of 40 hours unless otherwise approved. If you notice an employee consistently working too many hours, you may need to help them delegate tasks or spread their workload. Ensuring your employees don’t work too much overtime and don’t take on too much work will help prevent employee burnout.
- Improved productivity. Understanding how much time it takes employees to complete specific tasks will help you understand how you can make a project more productive. Based on the data, you can decide whether you need more support on future projects or whether you have too many employees working on a specific task or project.
- Improved employee accountability. Asking your employees to track their hours through a time-tracking app or other methods will help them take ownership of their working hours. This will increase employee accountability.
Top 5 Time Tracking Methods
When tracking your employee’s time, there are several methods you can use to make sure you’re keeping a fair and accurate log of hours worked.
Time tracking software
Time tracking software is a digital timesheet that allows employees to track their hours through a website or mobile app. Your employees can either set a timer—starting and stopping it when they begin and end tasks—or manually enter their work hours.
Time tracking software is usually connected to shift scheduling or payroll software and can make paying your employees for the time they work much smoother. There are many different time tracking softwares available; however, the most comprehensive is Connecteam’s software.
Connecteam’s easy-to-use app will turn any mobile device into a time clock, allowing your employees to register their working time from anywhere in the world. Learn more about Connecteam’s time-tracking app.
You can use spreadsheets to track your employee’s time. This method is one of the most customizable ways to track your employee’s time, as you can add columns for whatever information you require. A basic layout might look like the following:
|Employee Name||Client/Project||Start Time (HH: MM)||End Time (HH: MM)||Total Working Time (Hours)|
Tracking your employee’s time this way is highly accurate, and you can use the data included to create reports. However, spreadsheets need to be manually updated to track your employee’s time which can be time-consuming.
An honor system relies on your employees to honestly and accurately estimate how long a job or task will take them. With an honor system, your employees notify you of how long a task or project took, and you pay them for those hours.
There are clear drawbacks to this method. One drawback is that there is no log of how long a task or project took, meaning that this method is not FLSA-compliant. There is also the risk that employees work more or fewer hours than they notify you of, resulting in inaccurate payroll.
Physical time clock
A physical time clock in your workplace will allow employees to ‘punch in’ at the start of their shift and ‘punch out’ at the end. You can ask employees to use physical clock cards, or use an electronic method such as a fingerprint scanner.
This method allows you to have an accurate log of how many hours your employees have worked, but does not allow you to differentiate between specific projects or tasks.
Pen and paper
The simplest form of time tracking goes back to basics and involves a pen, paper, and a clock. With this method, employees write down their name, start time, and stop time. You can ask your employees to sign in and out of work at their start and end times using their signatures. This will prevent any misunderstandings.
You can also ask your employees to log how long it took them to perform each task or project for a more precise method. However, there is no need for you to do this unless you would like to, or if you feel you would benefit from this extra information. A key advantage of this method is that it is simple; however, it can be challenging to compile reports and process time sheets with these manual logs.
How To Pick The Right Time Tracking Method For You
It’s important to select the right method of time tracking for you and your business. Try following the below steps to help you decide what the right approach is for you:
Determine The Purpose Of Time Tracking
Considering what you have to gain from employee time tracking will help you decide what method of time tracking you should be looking into.
A more straightforward method, such as a spreadsheet or manual logs, may be beneficial if you only need records of your employees’ start and end times. An honor system may work well for you if you only have FLSA exempt employees on your team. FLSA exempt employees are paid a salary and do not receive overtime payments. Because of this, there is no legal requirement to keep a log of their working hours.
However, if you need a breakdown of how many hours employees spend on a specific task, or you are concerned your employees are working too many hours, you may consider utilizing time-tracking software. This will help you understand how much time employees spend on specific projects or tasks and will help prevent employee burnout by ensuring they do not regularly exceed 40 hour weeks.
Set Your Budget
Before considering which option is best for you, you need to consider how much you are willing to spend on your time-tracking solution. Some of the options discussed can be implemented free of charge. However, if you’re looking for a system with extensive features and capabilities, you may consider a digital tool like Connecteam.
Digital systems with advanced features can come with a higher price tag, so it’s important to set a budget beforehand and know how much you’re willing to spend. However, solutions like Connecteam offer a completely free, lifelong service for up to 10 employees. This includes all the features of the same, reasonably-priced service that accounts for more employees.
Research Time Tracking Options
Once you’ve determined why you want to track your employee’s time and you have decided on a budget, you can begin researching your time-tracking options. As mentioned above, many options are available to you at several different price points.
It’s important to consider which providers offer services that make your job easier, for example, providers that offer automated timesheets or overtime tracking. Decide on the areas you would like to improve—such as reducing time spent on recording your employees’ hours—before you begin researching.
Select the Best Option For Your Company
Once you’ve considered your different options, decide on the one you feel best suits your company’s needs and update your stakeholders on your choice. Consult with your managers and update them on the new processes to ensure they engage their team with your new time-tracking strategies.
Time tracking involves tracking how many hours your employees work to ensure they’re paid correctly for these hours. It’s important to track your employees working hours to make sure they do not exceed a 40-hour work week, and to comply with FLSA guidance.
There are several different methods for logging your employee’s working time, including spreadsheets, time tracking software, an honor system, a physical time clock, or manual tracking using pen and paper. Considering the tools you need and your budget will help you narrow down which time tracking method or solution is right for your business.