Employers have many responsibilities but perhaps the most important is complying with government rules and regulations. Especially when it comes to time clock rules for hourly employees.
The Fair Labor Standards Act (FLSA) imposes rules in regards to your employees’ wages, overtime, and hours.
Breaking laws regarding time clock rules can lead to serious penalties and fines for every single breach for the company. I think it goes without saying that this is something you’re eager to avoid.
The most effective and efficient way to make sure that you fulfill federal and state requirements for time clock rules for hourly employees is by using an employee time tracking solution that includes time clock and tracking functions.
We get into the importance of a digital time tracking solution further on, but below we dive into the various time clock rules for hourly employees in given situations and offer a full guide on how to stay compliant. So, let’s get to it!
Salaried VS Hourly Employee
When taking time clock rules into consideration, it’s a must that you understand the differences between salaried versus hourly employees.
A salaried employee receives payment based on an annual sum or salary.
As an employer, the decision is yours when the pay period is – weekly or monthly. Additionally, a salaried employee is not obligated to complete or even sign a timesheet.
The pay of a salaried employee is based on the salary as a whole rather than the number of hours worked. So if a salaried employee goes a little over or under the usual 40 hours of the workweek, the employer has no record of their working hours.
An hourly worker is paid for the number of hours they worked.
As the employer, you decide the number of hours your hourly employee must work. In the United States, certain states and cities have authorized predictive scheduling laws that mandate employers must give hourly workers a certain amount of notice for the hours they need to work, for example, a week, two weeks, or even a month before.
An hourly worker is obligated to record their working hours through a timesheet or time card system that the employer must verify.
Just ensure that you know the differences between…
- Full time and part time employees
- Exempt and non-exempt employees
- Plus, incorporate meal and rest breaks
Especially when managing payroll during a given pay period.
Industries like retail, hospitality, construction, and restaurants prefer to deal with shift changes using on-call work. When an employee is on-call, they are available to clock in and must wait for their manager to contact them if they need to come in.
However, in the United States, some states have banned an on-call schedule as it makes it incredibly difficult for employees to maintain a healthy work-life balance.
Now, the Department of Labor has a law FLSA Hours Worked Advisor to provide information about on-call pay (or “standby pay”) for employees and employers.
Whether hours spent on-call is hours worked is a question of fact to be decided on a case-by-case basis. All on-call time is not hours worked.FLSA
Pay for on-call work is when an employee is paid for the time they spent being available to work.
However, because the employee was on-call does not always mean that a specific employee will be paid.
Whenever an employee makes themselves available in the physical office or workplace for on-call work, the employer must pay them. Why? Because these on-call hours were spent in a restricted condition when the employee could not possibly use the time for personal reasons, therefore this time is considered payable as hours worked.
Working Off The Clock & Overtime Pay
Under FLSA, non-exempt employees are entitled to receive overtime pay equivalent to (or more than) 1 ½ time their normal rate, after working for 40 hours in a workweek. As the manager, it falls on your shoulders to make sure that your employees are paid if they work overtime.
However, some employers aren’t even aware that they have broken overtime pay legislation because an hourly employee worked off the clock – working off the clock is when an employee does a task that’s considered work without a clock in. For example:
- Uniform changes: When an employee must wait at the start, or end of their shift in order to accept or hand in their uniform or work gear, they have to pay for the time they spent waiting.
- Helping a customer: When an employee helps a customer out after their shift ends, they must be paid for the time they spent with the customer.
- Before a shift, extra preparation is needed: When an employee has to arrive early to set up for the business, like stopping at the bank to pick up cash for the register, they must be paid for this.
- Doing tasks after the business has closed: When an employee clocks out but continues to do work to close the business, like cleaning, requires payment for the tasks they’re completing while clocked out.
Time Clock Rules For Hourly Employees
We went through the key elements regarding hourly workers in terms of clocking in and out and tracking hours, but now we want to outline the time clock rules for hourly employees:
Time Tracking System
The FLSA does not force you to use one kind of time tracking system, therefore you are free to make your own choice, just as long as it’s accurate. Note that the system you choose must record the employee’s actual working hours, plus breaks.
In a single solution, you are able to easily track and manage employee work hours, whether it’s on jobs and projects. Plus, you can improve your payroll process, efficiently manage timesheets, and intuitively collaborate with your deskless employees in real-time and while on the go.
- Employees can clock in and out with a GPS timestamp
- Business owners can track employees throughout the day with live Breadcrumbs geo-tracking, getting an overview of where (and when) your employees are
- Request time off
- View current and past timesheets, and easily export them to Connecteam’s Quickbooks Online integration for 100% accurate payroll
- Add notes while on the go
- Gain easy oversight of employee status and location
- Automatic notifications
- Set limitations and have direct control to make sure time theft doesn’t happen
#1 Time Clock App
You must abide by the new time clock rules, the Connecteam digital time tracking app is the time-saving solution you’re looking for.
Still not convinced a digital solution is for you? Read our complete guide on why switching to a digital time tracking solution is the best choice for your business and your employees.
Per FLSA guidelines, you are allowed to round your employees’ reported hours to the nearest specified increment. In fact, you may round the time up and down. For example, if you round off in 15-minute increments and your employee finishes work at 5.11 p.m., then the time may be rounded up to 5.15 p.m.
Rounding up and down must be fairly executed because rounding down all the time, as in minutes being deducted, can lead to overtime and minimum wage laws being broken.
Remember that you are obligated to pay overtime when rounding causes an hourly worker to become entitled to overtime.
Employers are required by law to keep time cards (or other records) which outline how your hourly employees’ wages were calculated for at least two years. The two-year period is required by The United States Department of Labor and you must also provide the Wage and Hour Division access to inspect your records whenever necessary.
Connecteam can store working hour records for as long as needed.
Clocking In And Out
As the employer, it is your decision whether your hourly workers are allowed to be able to clock in early or clock out late. However, it should only be by a few minutes and not hours. Connecteam makes it easy to add a limit on clocking in early and clocking out late. With live breadcrumb geo-tracking, business owners can also make sure that employees are where they’re supposed to be while clocked in. You even have the ability to see an animated video that strings the breadcrumbs together, providing you a route that your employees took throughout the day.
Hourly workers deserve the opportunity to confirm their hours at the end of pay periods. Even if the hours are automatically recorded, Connecteam allows employees the chance to review and verify their hours.
Connecteam also allows the admin to auto-approve time cards with no variations, time off requests, and vacation. If overtime or irregularities occur with an employee’s time card, you immediately receive a notification so that you can look into the matter.
- Consequences of tampering, or attempting to tamper, with the clocking in and out system
- Consequences of time theft
- Consequences of buddy punching (clocking in or out for their colleagues)
- Rules on absenteenism
- Guide on working a 4/10 schedule
Wrapping Up Time Clock Rules For Hourly Employees
Knowing how important abiding by time clock rules for hourly employees is, it’s a no-brainer the importance of investing in a digital time clock app instead of the standard pen and paper.
It isn’t just about potential legal problems or incorrectly calculating an employee’s hours, but you could lose serious money if you don’t calculate hours correctly (like with rounding or overtime). And not to mention the countless other consequences of poor time tracking.
Be sure to read up employee timekeeping best practices as well.
Whether you’re a manager, business owner, CEO, and everything in-between, we cannot stress how time tracking is critical to the success of your business. Ensure that you’re on track, and in compliance, with time clock rules for hourly employees by making the smart and easy choice – go digital!
Start Accurately Tracking Time Today
You won’t believe how easy employee time tracking can get.