What is timekeeping?

Timekeeping is recording when employees start, stop and take breaks, so they are paid correctly and the employer has the records the law requires.

In shortTimekeeping is the process and system an employer uses to record employees’ working time: start and end times, meal breaks, and the hours worked each day and week. For non-exempt employees, federal rules at 29 CFR 516.2 require records including the hours worked each workday and the total hours worked each workweek, and the time of day and day of week the workweek begins. Timekeeping methods range from paper timesheets to mobile apps, kiosks and NFC tags. The method matters less than three things: accuracy, timely correction and records you can produce later.

What the records must show

For each non-exempt employee, 29 CFR 516.2(a) lists the payroll records an employer must keep, including the time of day and day of week the workweek begins and the hours worked each workday and each workweek. There is an option for fixed schedules: under 516.2(c), an employer can keep the scheduled hours and record only the exceptions, but the exact hours must be shown for any week with more or fewer hours than scheduled.

Retention is separate: payroll records for at least 3 years and basic time cards for at least 2 (29 CFR 516.5 and 516.6). For policy and best practices, see the timekeeping policy guide and timekeeping best practices.

Same crew: a written week vs. a clocked week414637424342Grey: 40 written. Blue: clocked. 240 vs. 251 hours
Written hours drift toward the schedule. Clocked hours show what actually happened.

Methods compared

Timekeeping methods
Method Strength Weak point
Paper timesheet No setup Written from memory, hard to audit
Mobile app with GPS stamp Works for field and multi-site teams Needs a clear policy on where clock-ins are allowed
Tablet kiosk One device for a site Lines at shift change
NFC tag Proves presence at a specific spot Tags must be placed and maintained

EZTime supports mobile app clock-in with a GPS stamp, web, tablet kiosk and NFC tags, and they can be mixed in one account.

Worked example: why written hours drift

Paper vs. punches for one week

A landscaping crew of 6 fills in paper timesheets on Friday. One week, the timesheets show 40 hours each, 240 in total. A trial of clock-ins the following month, on similar jobs, shows actual hours of 37 to 46, totaling 251, mostly because early starts and late returns from the last job were rounded to the usual 8 hours.

At $21 an hour, 11 unrecorded hours a week is $231 in straight time, and more if some of it falls over 40 in a workweek, before any penalties. The crew was not trying to cheat anyone; memory simply rounds toward the schedule.

Mistakes that are specific to timekeeping

Checking time records before payroll

A weekly review of exceptions catches most errors. Look for missing punches, shifts much longer or shorter than scheduled, meal breaks shorter than your policy, overtime that was not approved in advance, and punches from unexpected places. Fix each with a recorded correction before the payroll cutoff.

Track the number of corrections per location each month. A location with many corrections usually has a process problem, such as a clock in the wrong place, unclear rules on early clock-in, or a manager who approves without looking, and fixing it saves time for everyone. Share the monthly count with each location manager so the trend is visible and improvements can be tracked over the next quarter.

Second example: one clock, two entrances

A warehouse has one kiosk near the main entrance, but most pickers enter by the loading dock. Missing punches average 40 a week, and payroll spends 3 hours a week fixing them.

The warehouse adds NFC tags at the dock entrance so workers can clock in with their phones where they enter. Missing punches fall to about 8 a week within a month, and payroll’s correction time drops to under an hour, which leaves more time to review overtime and break exceptions.

Compare one week of memory with one week of punchesBefore choosing a system, run one week where people both write their hours and clock in. The difference between the two totals is the size of the problem, in dollars, for your own team.

Questions people ask

What is the difference between timekeeping and time tracking?

They are often used the same way. Timekeeping usually refers to the payroll and legal record of hours; time tracking can also mean tracking time by project or task.

What records does the FLSA require?

For non-exempt employees, among other items, the hours worked each workday and each workweek, and when the workweek begins, under 29 CFR 516.2.

Can I use scheduled hours instead of actual hours?

For fixed schedules, federal rules allow recording the schedule and showing exact hours only when they differ. Most employers find it simpler to record actual times.

How long must time records be kept?

Payroll records for at least 3 years and time cards for at least 2 under federal rules. States may require longer.

How often should time records be reviewed?

Weekly or each pay period, before the payroll cutoff, with exceptions reviewed first.

Who should be able to edit time records?

Only authorized managers or payroll staff, with every change recorded with the reason and approver.

Related on EZTime

More on this topic

Accurate hours from the first punch

Employees clock in by mobile GPS, web, kiosk or NFC, with geofencing, break alerts and missed-punch requests that keep an audit trail.

Disclaimer: Treat this guide to timekeeping as general information rather than legal, payroll or tax advice: rules vary by location and change, and every example here is fictional.