Timesheets record the amount of time an employee works. These records are used to calculate payroll for some employees and account for any paid time off or unpaid absences.
Wage and hour laws place great importance on accurate timesheet records. Time-tracking tools can assist your business with creating and maintaining appropriate timesheets.
What Are Timesheets Used for and Why Are They Important?
The main role of timesheets is to track the time that your employees are working. This allows you to calculate payroll. Accurate timesheets ensure your business is legally compliant. They also ensure that you’re paying your employees appropriately. Aside from payroll, timesheets can identify how long various tasks take to perform.
Wage and hour laws
Payroll is impacted by several federal and state laws—called wage and hour laws. Check with your local Department of Labor office if you are unsure of your state’s time-tracking requirements.
Any employee who is non-exempt under the Fair Labor Standards Act (FLSA) must have an accurate record of their time worked. This applies to hourly employees. Some salaried employees may also be FLSA non-exempt. Timesheets are used to capture these hours worked into legally compliant records.
Responsibility for maintaining accurate time records belongs to you, not to your employees. Failing to keep accurate records can lead to an investigation by the Department of Labor. There could be serious consequences if it’s found that you’ve not kept accurate or complete records. These consequences could include back wage payments, fines, and significant legal fees.
Accurate and timely employee pay
All hourly employees need to have an accurate record of their time worked so that you can calculate their pay correctly. Pay calculations include pay for the hours worked, any overtime pay, and any incentive pay for the pay period. Without accurate timesheets, making these calculations correctly can be difficult or impossible.
You are responsible for paying your employees on time. This is in addition to your responsibility for maintaining accurate time records. Even if an employee does not turn in their timesheet or they make an error, you cannot delay payroll. For this reason, having a good system in place to track time can be invaluable to your business.
Tracking time usage
Timesheets can also be a source of useful business information. For instance, your time tracking system may identify how much time is used for various tasks. You can use that data to plan your employee’s work schedules. This reporting can also be used to identify how much time goes into finishing different types of business projects.
Timesheet Methods and Tools
Timesheet methods can be as low-tech as paper timesheets. However, most employers opt for more modern tools to ensure timesheets are accurate and easily maintained.
If you keep paper records, remember that you are responsible in the event they are misplaced or damaged. The time you spend on payroll calculations also takes time away from your business.
When you are ready to adopt a more modern approach to timesheets, you will likely be deciding between a punch system and software solutions.
These systems have a set time clock where employees “punch” in and out of their shifts. The method for punching in and out of shifts usually involves a swipe card, fingerprint scan, or typing in the employee’s ID number. These are most common in warehouse or manufacturing environments. In these environments, employees always begin and end their shifts in the same place.
Unfortunately, punch systems still come with some drawbacks. For instance, an employee typing in the wrong ID number when punching in or out creates an error that may not be caught until payroll is in process. Employees often cannot see their time records to notice errors when they’re happening.
Another issue with punch systems occurs when adopting them into a “deskless” work environment. If your employees do not always begin their shifts in the same place, they’re likely to add unnecessary walk time to reach a punch clock. These systems also don’t typically have task-tracking capability to assign or track time spent on employee tasks.
Software solutions can be ideal for timesheets and time tracking in general. These tools often come with many useful features. Features may include accessibility for employees, timely error notices, and payroll software integration.
Software systems are ideal for office-based employees. It should also be considered for “deskless” employees. These types of employees will likely need software that offers mobile compatibility.
Connecteam offers simple and mobile time tracking. It integrates directly with payroll. Employees interact with the software directly. The software then automatically tracks overtime and other payroll necessities. It can also provide useful data, such as insight into how employee time is being used across assigned tasks or clients.
Timesheet Best Practices
Make sure your timesheet systems work for your business by following these best practices.
Ensure proper tracking
Timesheets for all employees must be accurate and appropriately maintained. If you find an employee has knowingly tampered with or falsified a timesheet, you may need to consider terminating that employee. Ultimately, the responsibility for keeping these records lies with you. Don’t take risks that timesheets are being altered inappropriately.
There will be occasions when a timesheet needs to be changed due to an error, such as an employee forgetting to clock in or out. When having to make a change, ensure both the employee and HR are notified of what was changed and why.
Send reminders and set a due date buffer
Be clear with your employees when timesheets are due. Systems like Connecteam can create automated reminders to ensure everyone gets notified at the right time. Even with reminders, there will sometimes be late timesheets to process. It is best to set a due date for timesheets that’s a few days before your payroll closes for the pay period.
With records as important as timesheets, it is necessary to take time to train all employees on how to track their time appropriately. The more difficult your time-tracking system is to use, the more time you will need to spend explaining it to employees.
Once you’ve explained how to use the time tracking system, HR or payroll should also train employees on expected clocking behavior. This should include when to clock out for meal breaks versus rest breaks. You should also make clear that employees must work only while clocked in.
Ensure you train both standard employees and supervisors. Supervisors need to know when they should question time entries and how to raise issues with HR or with the employee. If a supervisor suspects an employee is clocking out early and continuing to work, they should coordinate with HR so that they can investigate that concern.
Timesheets serve a very important role in your business. They are necessary to calculate employee pay correctly and are legally required. Investing in a time-tracking tool can protect your business from timesheet mistakes.