Managing employee hours, payroll, and compliance with state and local regulators are crucial aspects of any small business. If hours worked or employee pay isn’t properly tracked, employees can feel dissatisfied. On top of that, businesses are at risk if they don’t follow state labor practices, and you can actually lose money by not properly and accurately tracking worked hours and overtime. Time theft is enormous: 43% of people admit to exaggerating the number of hours worked. Some key time clock rules for employees can help small businesses run this part of their operation smoothly and with accuracy. A digital time clock manages any state level employment laws, keeping you up-to-date on any changes, and helps set breaks, overtime, and even minimize errors with payroll. Here, we’ll go through what a time clock is, how a digital time clock can help your small business, what the benefits are of using a time clock for employers and employees, and time clock rules for employees. What is a time clock?The image often conjured up for a time clock is a manual time card system with a card that employees “punch in” when their shift starts. Today, time clocks can be analog or digital. Whichever one you use, time clocks record when an employee starts their scheduled shift and when they end it by clocking out. Time clocks work to track employee hours, both regular and overtime, as well as any unpaid breaks. That way employers know the total sum of everyone’s work for a specific period. With that info, they can easily (and accurately) calculate payroll and wages. Time clocks can be:
The benefits of using a digital time clock for employeesDigital time clocks help both business and employees. They work to ensure schedules are correct, and that employees are going to be paid fairly for the time they have worked. Digital time clocks give employees the agency and responsibility that they are indeed working the hours they are scheduled for. Here are some of the many benefits of using a digital time clock: It saves employees timeUsing a digital time clock takes unnecessary administrative work out of what your employees are actually there to do. There’s an abundance of risk if employees use a manual, paper system to track their hours. Paper gets lost or destroyed or mixed up, which can take time away from their actual role. A digital time clock contains an employee’s hours, freeing them up to dedicate themselves back to the job at hand. Accurate schedulingEmployees need to know when and how often they’re working. Paper schedules posted on a corkboard are only effective for those at work. What happens if a shift is changed? Manually crossing it out and putting it in writing can sometimes cause confusion. A digital time clock holds accurate schedules, even when updates or changes are made. Even better: when someone swaps a shift or makes a change, everyone can be automatically notified. Using a digital time clock for scheduling shifts means an employee can trust that their schedule is accurate. Fair and precise payNothing is more important to hourly workers than getting paid for the time they’ve worked. A digital time clock is an important solution for employees that guarantees their hours have been accurately scheduled, recorded as worked, and will be paid out in the next pay period. This is especially helpful when employees are working overtime hours or have unpaid breaks that need to be recorded, too. Digital time clocks contain a record of those hours worked. 5 time clock rules for hourly employeesIt’s important to understand that, as easy and straightforward as a digital time clock is for employers and employees, there are rules in place both federal and at the state-level to ensure records are kept accurately, rounding up or down applies fairly, and who needs to have their hours tracked at all. 1. Which employees need to track their hours?Bare minimum, employees who work hourly must have their hours tracked. Anyone who does shift work should be clocking in and out using a digital time clock. 2. Time clock rounding rulesIt’s common for hourly employees to clock in before or after the 10 or 15 minute mark, or even at the top of the hour or half past. In that case, it’s legally okay to round up or down to the nearest increment of time. This way, payroll employees for businesses aren’t left to deal with small amounts and minute calculations. Say you have an employee clock in at 4:06 p.m. Rounding can occur in 10 or 15 minute increments. For 10 minute rounding purposes, employers can round up to 4:10 p.m. For the 15 minute increment, it would be rounded down to 4 p.m. The practices of rounding differ business-to-business. Nonetheless, your business needs to comply with FLSA rounding regulations to avoid any legal issues or penalties. 3. The 7-minute ruleWhile businesses may approach rounding differently, many of them do choose the 15 minute increment mark for tracking and rounding. With that said, meet the 7-minute rule that allows businesses to round depending on when employees clock in or clock out. If your employee clocks in or out within the first 6 minutes of a 15 minute block, that gets rounded down to the top of the hour. For example, if an employee clocks out at 3:04 p.m., that number is rounded down to 3 p.m. Where the 7-minute rule comes into play is if clocking in or out occurs at the :08 timestamp. If that same employee clocks out at 3:08 p.m., their end time is rounded up to 3:15 p.m. Complicated? We know. That’s why working with an all-in-one system like Homebase can help keep you on track. From schedules to time clocks to payroll, skip the headaches and save yourself time, money, and major stress. How to stay compliant with the Department of Labor’s record keeping rulesEvery employer with hourly workers or non-exempt salaried employees must keep detailed records. Records to keep include but aren’t limited to:
Make sure employees remain compliant with the FLSA by doing the following:
5. State-specific time clock rules and lawsCompliance can be challenging. There are both federal and state-level regulations businesses are required to adhere to when it comes to employment practices, especially those that require management and tracking of hours worked, and any overtime pay. WisconsinAny worker in Wisconsin who exceeds 40 hours in a 7 day work week is eligible for overtime that’s 1.5 their regular pay. Additionally, employers aren’t legally required to give employees breaks. If they do, breaks are paid up to 30 minutes, and considered unpaid over that time. FloridaFlorida doesn’t have any state-specific laws on overtime work, so employers comply with federally mandated overtime rates for those exceeding 40 hours. They must be paid 1.5 their regular rate. Florida does have a lengthy list of what non-exempt salaried employees earn for overtime, like the amounts for specific roles and salaries, and it includes those on a Fluctuating Workweek Method. You can read about those here. CaliforniaCalifornia is one of the more thorough examples of how employees and employers track time and payment. The state has conditions around split shifts for employees, including a premium equal to one hour of pay, which appears on a separate pay stub. Employers are required to keep track of split shifts to ensure accurate data for payment. The law in California states that “reporting time pay constitutes wages.” Translation? “Reporting time” can actually fall under the the following categories:
If an employee in California does any of the above, those hours need to be tracked for payment purposes. According to Californina’s Department of Industrial Relations, for overtime work, employers must:
Best practices when using an employee time clocksDigital time clocks are beneficial for both employers and employees to ensure hours scheduled are the ones employees are being paid for. That said, there are still a few important practices and tips to consider when using an employee time clock. Create a time clock policyCreate clear parameters on what a time clock is for and why time-tracking methods are useful for both the business and employees. Here are some examples of what that policy can included:
Clearly communicate your time clock policies to hourly employeesCommunication goes a long way in the workplace, especially when new processes or technologies are introduced. Clearly indicate your expectations to your employees around using a time clock. Make sure you reinforce the benefits of using the time clock, like minimizing manual errors that could result in less pay. Provide time clock training for employeesBasic training for any new tool or technology in the workplace is a must. Take the time to educate your employees, including managers, on how to use a time clock. This should live in your employee onboarding and training documentation. New employees should be expected to learn how to clock in and out for a shift so ensure there’s proper documentation. Use notifications as reminders for employeesA clear way for employees to develop autonomy over clocking in and out of their shift is to enable notifications. As much as time clocks are a useful tool for employers to streamline scheduling and payment tasks, all while avoiding errors, a digital time clock helps employees stay on schedule, track their own hours, and expectations of pay. Automations for letting an employee know they can clock in or out via notifications or messages in-app is a helpful reminder. Monitor overtime and time theftLook over timesheets or compare previous schedules with actual time spent at work by employees. Time theft means a business can lose valuable dollars. Digital time clocks are a useful way to have this task automated to ensure an employee hasn’t remained clocked well past the end of their shift or for time they aren’t scheduled to work. Homebase: The best employee time clock for your small business
Time clock rules for hourly employees FAQsDo hourly and salaried employees need to track their hours?Yes. Every hourly employee should track their hours worked, including breaks and any overtime hours. Only salaried employees who are categorized as non-exempt employees are eligible for pay if they work any overtime hours. It’s important for those salaried workers—depending on their salary range, and that differs from state-to-state—to track and maintain a record of that work to ensure accurate pay. Is using a time clock legal?Yes, using a time clock is legal, but not required ( according to the FLSA). There’s no federal requirement for a time clock to be used to track hours worked, but it can help you prevent other compliance and legal issues that could land you in hot water. What are time clock rounding rules?It’s legally okay to round up or down to the nearest increment of time when an employee clocks in or out for their shift. Most businesses abide by the 10 or 15 minute increment rule. For example: if an employee clocks out of a shift at 4:04 p.m., and that business is on a 10 minute incremental clock, that number would be rounded down to 4 p.m. The 7-minute rule allows businesses to round up or down depending on when employees clock in or clock out. If your employee clocks in or out within the first 6 minutes of a 15 minute block, that gets rounded down to the top of the hour. What is the best employee time clock for my small business?Homebase is a great time clock solution for small businesses. It minimizes time theft and controls labor costs; effortlessly tracks employee hours, and can even help you run payroll. It’s easy to get signed up and onboard your team, and Homebase also offers HR support to help with all your small business team needs. A free time clock that frees up your time. Track hours. Prep for payroll. Control labor costs. All with our free time clock. Try Homebase time clock The post 5 essential time clock rules for hourly employees appeared first on Homebase. via Homebase https://joinhomebase.com/blog/time-clock-rules-hourly-employees/
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