Have You: Created a Time-Keeping System?

Not too long ago I wrote a post about a company that was penalized for not having a proper (or legal) time-keeping system in place. Consequently, they were fined and forced to expend time, and money…lots and lots of money, defending themselves in court. If you’re looking to avoid a similar fate, here are a few things to bear in mind when creating your own time-keeping system. Remember, the smaller and more collegial an environment is the more likely this is to be a problem. Whether you have two or twenty, you should have some system that allows you to substantiate everything you report. A couple things to keep in mind are:

  • The US Department of Labor has record-keeping guidelines that must be adhered to under the Fair Labor Standards Act. Take a look and see if you’re in compliance.
  • Figure out a system. For those with a small outfit, you can always resort to the time old handy-dandy spreadsheet. Nowadays many of the word processor programs come with some type of template that can be customized in minutes. If you are wanting to keep a better eye out,  then set up a general sign-in somewhere up front.
  • For those with larger outfits, you may be able to purchase a computer program, use one of those systems that allow employees to call in to a voice-mail system or set up  a time-clock.
  • Whatever system you put in place make sure its consistent. If on paper, ask that time-sheets be turned in weekly or bi-weekly. Combine these time-sheets to come up with total hours for every month and year.
  • As close as you are to your employees, you must resist the urge to defer. Always check over everything turned in, reiterate the need for honesty and do your best to put in place practices that mitigate or alleviate “tweaked” numbers. After all, if things turn out to be wrong people won’t be looking at that employee nearly as much as they’ll be looking at you.
  • In order to avoid errors it might help to come up with a time-keeping system that can be integrated into payroll system. Especially if you don’t have the right accounting or payroll practices in place.
  • Be careful to ensure that your record-keeping doesn’t affect the status of any non-exempt employees.
  • Determine how you are going to treat fractional hours. Are you going to round up? If so, how? And by what amount?

For a few time-keeping suggestions check out this article from msnbc. And for more information on how to navigate the exempt employee/time-keeping maze Lisa A. Royee has an article called Timekeeping and Exempt Employees that provides a little more clarification.


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