Benefits and best practices of timesheets for salaried employees

Salaried workers — and the companies that employ them — might assume timesheets aren’t relevant. Since they’re receiving a fixed salary regardless of the hours they work, why should they track time?

But timesheets for salaried workers offer a practical solution to the challenges of monitoring productivity, job performance, and when employees work. They also make it easier to keep track of billable hours and help companies manage project timelines.

In this article, we’ll look at the benefits of setting up timesheets for salaried employees. We’ll also discuss the most effective ways to use timesheets and show you how a tool like Homebase’s time clock can help you keep better track of salaried employees’ hours with minimal effort. 

Are timesheets required for salaried employees?

Timesheets aren’t required for salaried employees. In fact, federal law on timesheets states that employers shouldn’t track their salaried employees’ hours if the purpose relates to their pay. However, this doesn’t mean you can’t ask your employees to complete timesheets for other reasons, like monitoring productivity, understanding work hours, or calculating billable hours.

What are the benefits of implementing timesheets for salaried employees?

Timesheets can help you spot where time is well-spent, identify tasks that take up too many hours, and uncover ways to boost efficiency. In addition to these small business benefits, implementing timesheets can help you look after the well-being of your teams.

Let’s take a closer look at how.

Manage paid time off (PTO)

Tracking salaried employees’ work hours with timesheets makes it easier to know when they’ve earned paid time off (PTO), as well as how much they’ve used. 

You’ll get a clear record of the time your team members spend at work, as well as get access to other crucial data like vacation days and sick days. That way, you can easily keep tabs on remaining PTO balances. 

Homebase’s timesheets tool offers built-in features for these calculations.

Evaluate employees

Even though you can’t change a salaried employee’s pay depending on the hours they work, you can use the information to measure productivity or spot patterns of lateness or early departures. Alongside giving you detailed data so you can address the issues in performance reviews, these insights can help you design training programs or offer additional support to employees who are struggling at work. 

Time clock tools also empower salaried employees to self-assess their productivity. By logging their daily activities and the time they spend on different tasks, they can determine how to best allocate their time and identify lengthy tasks, unnecessary distractions, or areas where they can work more productively.

Stave off burnout

Timesheets for salaried employees help to prevent burnout by showing when employees are overworking or not taking enough breaks. By keeping track of these patterns, you can step in, offer support if necessary, and restore balance to your team members’ lives.

And with a platform like Homebase, managers can set up alerts so they get notified when employees are working too many hours, so they’ll always be in the loop without necessarily being on-location.

Track project hours accurately

Timesheets for salaried employees help you accurately track how many hours people are investing in particular projects. This is especially useful when specific team members work on projects where you bill clients by the hour. 

By monitoring how many hours employees are spending on specific projects, you can investigate their profitability and what effect that’s having on your business. You can also update your billing processes so you create invoices based on the true number of hours people are working rather than an estimation.

Check team members are working reasonable hours

You probably have employees who wear multiple hats and whose salaries are funded by various department budgets. If so, tracking their hours with timesheets is key, as this simple method can help you split their salary accurately between departments. Furthermore, it’ll help you notice if they dedicate too much time to one department’s tasks.

7 best practices for using timesheets with salaried employees

Now you know the advantages of using timesheets with salaried employees, let’s take a look at seven best practices for getting the most out of them.

1. Use an automated time tracking tool like Homebase

A graphic that shows different views of Homebase's time clock interface.
It couldn’t be easier for employees to track the hours they work with the Homebase time clock.

To clock your salaried employees’ hours accurately without making them do extra work, avoid using spreadsheets, which may contain errors in 90% of cases. Instead, consider an automated time tracking tool like the Homebase time clock. As well as streamlining the time tracking process, doing so will:

  • Let employees clock in and out of work from nearly any device. 
  • Provide detailed reports and analytics about your team members’ hours.
  • Calculate the total hours employees are working, including breaks and overtime.
  • Monitor labor cost per hour by department and role.
  • Link with your sales data, allowing you to compare labor vs. sales and set appropriate targets.

To get the most out of your time tracking tool of choice, it’s worth setting up a structured timekeeping framework. This means explaining how you expect employees to log their time in detail and including information like time tracking methods and time clock rounding policies.

2. Communicate the importance of timesheets

Transparency is crucial when you’re dealing with internal processes and employee data. If you don’t explain why you want your salaried employees to complete timesheets, they may think you’re spying on them or doubting their commitment — resulting in resentment and timesheets not getting submitted correctly. In addition, people often don’t follow processes as well when they don’t understand the why behind them.

By clearly explaining the reasons and benefits of using timesheets to your entire team, you’re increasing the likelihood that everyone will participate willingly and positively.

3. Simplify the data entry process 

The easier it is for your team to track their time, the more accurately they’ll do so — which means the data you collect from the process will be more valuable. So, consider the level of detail you need in your reports. 

For example, you might need to know how long a task takes, like stocking shelves in your retail store. You may also need a breakdown of the time employees spend on each specific activity within that task, including removing stock, dusting off shelves, and placing goods on the shelves. But by getting access to these granular insights, you’ll be much better positioned to set up employee schedules accurately and save on labor costs.

4. Have a clear set of time tracking goals

When you’ve explicitly established your time tracking goals, you’ll better understand team productivity while promoting accountability and transparency in the workplace. 

That’s why before, you should plan your approach to time tracking around what you want to know. 

Here’s a list of questions you may want your time tracking data to answer: 

  1. Which tasks or projects take up the most time?
  2. Which employees work overtime regularly? Is the overtime approved or not?
  3. How does the time employees are spending on tasks affect results and/or output?
  4. How much time do employees spend on non-billable tasks?
  5. Can time tracking help future project budgeting?
  6. How much should you bill customers? Or how much should your products/services cost?
  7. Is the current workload distribution fair and efficient?
  8. How does the time employees spend on tasks compare with estimates?
  9. Are there potential areas where automation or additional resources could be beneficial?

5. Make the process beginner-friendly and accessible

If you want your salaried workers to complete timesheets, ensure your policy is clear and straightforward so nothing stops them from following your business processes. Also, it’s ideal to give them an app like Homebase’s automated timesheets, which is intuitive, easy to navigate, and specifically designed to be beginner-friendly. 

Other than that, providing training and support on how to use a new time tracking app effectively will boost employees’ confidence in navigating it and encourage them to view it as a helpful tool rather than a chore. 

6. Maintain confidentiality

Detailed timesheets may reveal sensitive information about an employee’s wages, work hours and patterns, project involvement, and time off usage, among other things. That’s why it’s essential to prioritize confidentiality by making sure only authorized personnel can access this kind of data for essential business reasons.

Ensure that your timesheet system is secure and respects data protection legislation. And even more importantly, communicate to employees how you’ll gather, process, and store their data and make sure you have their informed consent.

7. Encourage accurate time tracking practices

Here are a few ways to motivate your employees to log their time accurately:

  • Recognition: Shout out team members who are diligent people with their timesheets during team meetings or company-wide communications on your messenger app.
  • Flexible work schedules: Allow flexibility in working hours or the option to work from home for those who consistently meet their time tracking responsibilities.
  • Monthly lunch or team party: Host a meal or a small celebration for the group, team, or department with the best record for completing timesheets.
  • Timesheet champion” award: Create an award for an individual who sets a great example in terms of time tracking and consistently completes their timesheets accurately and promptly.
  • Points system: Implement a system where employees accumulate points for each accurately completed timesheet. Then, they can redeem their points for rewards once they reach a certain threshold. 

Pro tip: Keep incentives positive. The goal is to foster a positive and supportive work culture where employees understand the importance of accurate time tracking and are motivated to participate consistently.

Streamline employee time tracking with Homebase

While it’s not essential to use timesheets for salaried employees, that doesn’t mean you shouldn’t. Doing so can bring huge benefits in terms of productivity, analytics, and employee well-being to your small business.

In this article, we examined the best practices for setting up timesheets. All in all, to make the most out of them for salaried employees, it’s essential to communicate their importance, set clear goals, maintain confidentiality, and create a user-friendly system for team members to use. 

That’s where Homebase steps in. Our time clock tool gives employees a versatile app they can use on any device and offers managers the insights they need to understand how long work takes, how well people are performing, and how profitable your business is.

Frequently asked questions about timesheets for salaried employees

How can timesheets improve productivity among salaried employees?

Timesheets can enhance productivity among salaried employees by promoting transparency, organization, and time management. They also help visualize work distribution, which allows management and employees to spot inefficiencies and better allocate time to high-priority tasks.

Do salaried employees have to clock in?

No, salaried employees don’t have to clock in. However, business owners and managers may still ask them to do so to track their work hours, improve time management, measure productivity, and understand how long people are spending on different tasks.

When do salaried employees need to fill out timesheets?

Salaried employees may need to fill out timesheets under the following circumstances:

  • When the business charges clients based on the number of hours worked, so management needs accurate records for billing purposes.
  • When doing so is necessary to monitor and manage their paid leave or vacation time.
  • When their salary is sourced from multiple departments, so managers need a clear record of how much time they spend working with different teams.

What is the timesheet in payroll?

A timesheet records an employee’s hours during a specific payroll period. Small business owners and managers use them to calculate wages for hourly employees. They may also implement them for salaried employees to track work hours, leave time, and overtime, as well as attribute time to specific projects or tasks.

Why should you use automated timesheets? 

Automated timesheets increase timekeeping accuracy by reducing human errors, improve efficiency by eliminating the need for manual entry and calculation, and save time, which frees up resources for other tasks. 

They also make managing and monitoring data easier, with real-time tracking and digital storage for easy retrieval and analysis. Additionally, automated timesheets can integrate with other systems like payroll and project management, further streamlining the way businesses operate.

Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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