At the core of every business’s success, is the hours its employees put into building it. But to stay profitable, business owners need to be accurate with their employee time tracking, for multiple reasons.
From staying compliant to continued profitability, employee time tracking is a necessity for your business to stay competitive.
What Exactly Is Employee Time Tracking?
Simply put, employee time tracking is the recording of hours your employees spend working, so you can pay them accurately and stay compliant with Fair Labor Standards Act (FLSA) timekeeping requirements.
It also helps you keep accurate records for taxes, audits, budget analysis, Paid Time Off (PTO), and more. For companies that do government contracts, tracking employee’s time must be accurate and detailed to avoid delays in payments or, worse, non-payment.
Exempt Employee Time Tracking Policy
An exempt employee is one who is usually salaried and is not entitled to overtime pay, according to the FLSA. However, there are benefits to having exempt employees clock in to track their hours, especially in construction and field service companies:
- Accurate billing and invoicing
- Accurate payroll records
- Easily track PTO
- Calculate overtime costs
- Better project management
While the law does not require employers to track the hours of exempt employees, having an exempt employee time tracking policy will help your business in these ways.
An effective policy does not need to be complicated. It can be as simple as requiring them to use the same employee time tracking system that your non-exempt employees use.
Benefits Of Tracking Employee Time
Termed “The Most Dangerous Phrase in Business,” by Forbes, “we’ve always done it this way,” could be death to any business. So if you’re still relying on paper timesheets, guesstimations, and the memories of your workers, you’re likely losing money.
If not, you are certainly at risk of non-compliance with the FLSA.
But staying profitable and compliant are just a couple of benefits of employee time tracking.