Your workforce is your business’s greatest asset and competitive advantage. Employees are the lifeblood of your business, and the time they spend at work is just as valuable to them as it is to you.

Tracking this time is valuable, too. It is not only critical to your business to ensure your staff is showing up and putting their time in, but it’s also important for your bottom line.

That’s easy though, right? Time and attendance tracking just involves a simple clock-in and clock-out system … or so you might think.

Unfortunately, it is not always as simple as it sounds … Employees are late, forget to clock in, or ask their peers to clock out for them. New hires take time to get acclimated to the attendance policy. Employee turnover leaves timesheets unfinished, and they pile up as supervisors scramble to keep things going.

While time and attendance tracking can leave you with a bigger-than-anticipated headache in the human resources department, that doesn’t have to be the case. Software solutions like Homebase were created to solve this problem with tools like our Free Time Clock software and Free Timesheet App. We also developed this guide with everything you need to know about tracking time and attendance for your business. Here’s what we’ll cover:

  • Ease of use: Your chosen system should be simple to implement and seamless for your employees to use on their own.
  • Accuracy: Look for a system you can rely on to produce accurate time records and payroll data.
  • Flexibility: Choose a system that can adapt to all of your timekeeping needs, not just hours worked. This includes time off, break times, and employee scheduling.
  • Affordability: Your system shouldn’t break the bank. With so many options, ensure your system is well within your budget.
  • Integrations: Choose a system that integrates with the software you already use, such as your payroll or scheduling software.
  • Alerts: Look for a system that lets you know when your employees clock in or out, when they are nearing overtime, and when they miss work altogether.
  • Compliance: Your system should support FLSA compliance by saving your time card data in case of an audit or investigation.

By the end of this guide, you will be fully equipped to choose a time and attendance system that makes your life — and the lives of your employees’ — easier.

What is a Time and Attendance System?

A time and attendance system is a tool for tracking the hours that your employees work. It also helps you monitor and record early and late arrivals, break times, overtime, and missed work.

There are various types of time and attendance tracking systems, including paper and pencil methods, digital timesheets, punch clocks, biometric tools, and software solutions. Each variation comes with its own benefits and drawbacks, all of which we cover later in this guide.

Why Do You Need Time and Attendance Tracking?

Hourly employees are paid for the work they complete, which makes it all the more necessary for you to understand precisely how many hours they put in — and how it impacts your business.

Unfortunately, there are many factors, both intentional and unintentional, that can impede accurate time and attendance tracking. That’s where an organized, automated time and attendance system like Homebase can come in handy by taking one more thing off your plate.

Here are some reasons why you need a time and attendance tracking system.

To Correct Human Error

We are all human. Employees forget to clock in or out, accidentally enter the wrong time, or neglect to record their hours altogether. A time and attendance system can help combat these errors without asking too much of or micromanaging your employees.

On the flip side, these systems can also prevent “time theft” such as recording hours when not at work or clocking in or out for a coworker, which is known as “buddy punching” and costs employers over $373 million each year.

A time and attendance tracking system can help correct both intentional and unintentional human errors and keep your records accurate and honest.

To Minimize Labor Costs

Your time and attendance tracking records directly impact your payroll, and every dollar counts. If those records are inaccurate or compromised, you are likely paying too much in labor costs. A time and attendance tracking system ensures you can rely on your time and attendance records and accurately pay your employees for their time worked — not time scheduled.

Systems like Homebase can even show you labor costs in real-time, giving you valuable insight on employee activity and business operations and showing you where you can make improvements.

To Keep Your Processes Consistent

There’s a lot to do at work, and employees and managers are often challenged to do more with less. Inconsistent time and attendance tracking can drain resources and waste precious time and energy.

A time and attendance system ensures fair, consistent tracking and removes the need for delayed reporting and double-checking, which can affect the productivity and morale of managers and employees alike.

To Engage and Empower Your Employees

Employees make mistakes when recording their own hours, but no one likes to be micromanaged or subjected to a clunky, erratic process. A time and attendance tracking system enables employees to easily manage their own time card and gives managers confidence that the information is accurate.

Moreover, systems like Homebase allow employees to check their paycheck balances, change their schedule, and request overtime or time off. This encourages employees to be more engaged with their job and day-to-day responsibilities.

To Provide Business and Workplace Insight

Your employee’s work hours, schedules, and paychecks affect many important operational and managerial decisions. A time and attendance tracking system provides your organization with real-time, accurate data so you can make informed decisions quicker, such as how you are spending your budget or whether you need to expand your team. These systems also inform your managers of how their employees are spending time at work and how that might be affecting your business’s bottom line.

A time and attendance tracking software is a valuable investment that helps you prevent and avoid a whole host of mistakes and inaccuracies. Now, let’s talk about the various time and attendance tracking methods that your business can choose from.

Time and Attendance Tracking Methods

With so many time and attendance tracking methods available, it can be difficult to decide which one to choose. It can also be tricky to introduce a new system to your business and employees.

This section will discuss the various time and attendance tracking methods and their benefits and drawbacks.

Here’s what we recommend considering when determining the best time and attendance tracking system for your business:

Ease of use: Your chosen system should have a simple integration and should be seamless for your employees to use on their own.

Accuracy: Look for a system you can rely on each pay period to produce accurate time records and payroll data.

Flexibility: Choose a system that can adapt to all of your timekeeping needs (such as wage and hour data), not just compensatory time. This includes time off, break times, and employee scheduling.

Affordability: Your system shouldn’t break the bank. With so many options, ensure the service is well within your budget.

Integrations: Choose a system that integrates with the software you already use, such as your payroll software or scheduling software.

Alerts: Look for a system that lets you know when your employees clock in or out, when they are nearing overtime, and when they miss work altogether.

Compliance: Your system should support FLSA compliance by saving your time entry data in case of an audit or investigation.

Only one of the below methods offers all the features listed above — the time and attendance tracking software (like Homebase). That’s not to say the other methods are viable options, though. As you read through, consider what’s best for your business.

Pen and Paper Timesheets

Pen and paper timesheets are exactly what they sound like — using pen and paper to manually track employee hours, overtime, and time off. This may look like a printed spreadsheet or a piece of paper on a clipboard.

This may seem like an outdated method in today’s highly digital world.. However, some businesses still use it. The pen and paper method is inexpensive and easy to implement and use, especially for small businesses or startups.

Still, this method has plenty of limitations.Employees can easily make a mistake or take advantage of the system by intentionally recording the wrong times or asking a peer to clock in or out for them (remember “buddy punching?”). Handwriting can be hard to read and cause payroll discrepancies or disputes, which may lead to legal problems while also affecting morale and productivity.

Manual tracking is also impossible to digitize and automate. It requires you to physically enter timesheets into your HR or payroll systems, and it doesn’t help manage other employee scheduling and time tracking.

Digital Timesheets

Digital timesheet tracking is an employee self-service method that requires staff members to manually track their own time on a computer or tablet. This method requires access to an Excel timesheet or other digital timesheet tool.

This method is similar to pen and paper tracking in that it is inexpensive and easy to adopt, but it takes it a step further by making it much easier for managers to calculate and process payroll. However, it’s still easy to manipulate. While the possibility of buddy punching is eliminated due to the fact that employees are responsible for filling out their own timesheets on their own devices, still enables employees to enter the wrong times on their own and log more paid time.

Punch Clocks

Punch clocks such as Lathem and Acroprint refer to the physical process of clocking in or out at work. Many businesses still use them, especially in industries like construction and manufacturing where employees don’t use regularly use computers. For these companies, it’s convenient to keep a punch clock on-site or in a central location.

Punch clocks can be convenient and easy to implement for employees; all you need is the physical time clock and a short training on how to clock in and out.

But this method also comes with its own set of drawbacks. Since punch clocks only require a badge or punch card to clock in or out, it’s easily susceptible to buddy punching and other forms of time theft.

Punch clocks are also more expensive in the long run. Not including the cost of inaccuracy and fraud, the paper and other materials can add up over time, and managers can end up spending a lot of time to manually calculate and enter all the payroll information from the punch cards.

Biometric Time Clocks

Biometric time clocks use a unique body measurement, such as fingerprinting, retinal scanning, or facial recognition, to clock employees in and out. This ensures that employees are only getting paid for the time they work, not the time they’re scheduled.

Biometric time clocks are used for many reasons. Since employees have to sign in with their own fingerprint or retinal scan, these clocks completely prevent buddy punching and other methods of time theft. They also ensure payroll accuracy since employees are not manually entering (and possibly manipulating) their timesheets.

This method also comes with pitfalls despite its precision. First, and most importantly, biometric time clocks are not legal in every state, so this method is not as widely adopted as the other methods on this list. Be sure to consult with a local labor law attorney before using a biometric time clock at your company.

Biometric time clocks can also be intrusive and cause employees to feel as if they’re not trusted. Your staff members may want to protect their biometric data and feel hesitant to submit it at work. As important as it is to collect accurate time and attendance data, it’s also important to maintain trust and morale with your employees; utilizing this method may compromise that.

Time and Attendance Tracking Software

Time and attendance software is the newest form of time and attendance tracking for businesses of all sizes. Homebase is a prime example of these kinds of time and attendance apps and online tools.

There are many perks to using a software like Homebase as a time clock and timesheet tool — more than any other method on this list.

Homebase is an easy workforce management solution that is flexible to implement and can be accessed by employees and managers on mobile devices, tablets, or computers. Employees simply enter a unique PIN to clock in or out; they don’t have to carry a punch card or submit a weekly timesheet. Furthermore, GPS location and clock-in photos prevent early clock-ins and prevent buddy punching.

Homebase integrates with your payroll processing software, workforce scheduling software, and even your POS software, making it easy for managers to process payroll and employees to schedule shifts and claim tips. The software also prevents early clock-ins and unintentional overtime by automatically blocking certain tasks and sends an email notification to the manager when such events occur. Employees can even stay up-to-date by checking their hours and pay in real-time.

Finally, Homebase stores your cloud-based time and attendance data for up to four years — two years beyond what FLSA laws require.

On the flip side, some time and attendance software can be expensive. Most require training to ensure your managers and employees are up-to-speed with the software. It’s best to look for a software that offers free tools that allow you to get started easily and plenty of customer support — like Homebase.

Here is a concise breakdown of each method and its benefits and drawbacks:

Pen and paper timesheetsInexpensive and easy to implementRequires manual entry and is subject to human error and manipulation
Digital timesheetsInexpensive and digitizedSubject to human error and manipulation
Punch clocksConvenient and easy to implementRequires manual entry and is subject to buddy punching
Biometric time clocksPrecise and prevents buddy punchingIntrusive and illegal in some states
Time and attendance softwareFlexible, automated, and preciseCan be expensive and require training

Time and Attendance Tracking Systems and Labor Laws

Time and attendance management systems help you produce accurate payroll records, empower your managers and staff, and avoid time tracking headaches. But that’s not all they’re valuable for … they can also help you follow the law.

The Fair Labor Standards Act (FLSA) exists to establish standards for minimum wage, overtime pay, record keeping and youth employment for workers in the private sector as well as federal, state, and local governments.

Practically every business in the U.S. must comply with FLSA standards and regulations. Part of the FLSA requires businesses to keep specific employee records — notably payroll records, employee time cards, piecework tickets, wage rate tables, work and employee schedules, and records of additions to or deductions from wages.

The Department of Labor (DOL) website specifies that businesses must keep payroll records for three years and all other records for two years.

What happens if you violate the FLSA? Depending on your penalty, you could be fined upwards of $10,000 or even imprisoned. For wage violations, you’d be required to pay those to the impacted employees. Worst of all, FLSA violations can lead to a lot of bad press … costing you more in the long run than any fine would.

It’s well worth the effort to remain FLSA-compliant, and a time and attendance tracking system like Homebase can help. Homebase stores time card data for four years — two years longer than FLSA requirements. It also stores time card edit history, which can be helpful for DOL investigations as well as your managers. You can see when and how a timesheet was edited, and by whom.

Homebase also helps you remain compliant with overtime and employee break time standards. The software sends you text and email alerts when employees near or hit overtime and send reminders to both you and your employees when it’s time for them to take a break.

Finally, Homebase stays up to date on all labor law changes and updates, ensuring that their system is compliant and prepared for any legal changes — and that your business won’t be affected.

Between FLSA requirements, union regulations, and other labor laws, there are a lot of obligations to manage when it comes to paying your employees. A time and attendance software ensures you remain compliant to all the necessary rules and laws as well as avoid employee complaints.

How well do you know your federal labor laws? Take our quiz to test your knowledge.

Time and attendance tracking shouldn’t be a day-to-day burden on the long list of issues you most likely have to worry about as a business owner.

By simplifying time tracking management with automations, integrations, and real-time reports, you can be confident that your employees’ time is being spent wisely — and so is your budget.

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