The simplest answer would be yes, timesheets are a legally required document. Employers have to keep accurate records of employee work hours as part of the requirements for recordkeeping from the Federal Law. And timesheets are the best tracking time method for the job.
In today’s article, we’ll be writing about the labor laws that apply to timekeeping, i.e., timesheets, and the different laws and regulations that are imposed on hourly and salaried employees, including sanctions for not following the laws and more.
Let’s start off with a little bit of history.
The Fair Labor Standards Act
Every company registered in the United States is required to track the work hours of its employees or team members in order to comply with the Fair Labor Standards Act of 1938.
The Fair Labor Standards Act, or FLSA for short, is a thoroughgoing law that transformed America’s working culture in profound new ways. Apart from tracking employee work hours and keeping time tracking records, the law introduced some revolutionary acts that brought massive improvements to the old legal framework, such as:
- A minimum wage for any type of work.
- A maximum limit of 40 work hours per week with a 150% pay rate obligation for overtime work.
- Work regulations that made manufacturing and metallurgical labor illegal for children under 18. The employment of children under 16 during school hours also became illegal.
Are Timesheets Required by Law?
While the legal action has been around since the 1930s, since then, it has been put through several modifications, including several amendments. Today, the act has evolved to the point where it’s a cornerstone of the relationship between employers and employees.
The fact that all company owners/employers are required to use some kind of timekeeping method to track their employees’ work hours make timesheets a legal requirement.
Employers can track their employee’s hours using different timesheet methods, such as paper timesheet templates, computer-based timesheet templates such as Microsoft Excel, or timesheet software.
All of these time tracking methods are in compliance with the law as long as they procure accurate and complete records of employee work hours.
Now, let’s see how you can ensure that your timesheets are compliant.
Timesheet Legal Requirements - How to Ensure Your Timesheets Are Compliant
Your timesheet system needs to be in compliance with several different laws and regulations, including federal, general, and state laws and different regulations regarding employee timekeeping.
What Is Timesheet Compliance and Why It Matters
Simply put, timesheet compliance means that a company owner or employer adheres to federal and general timekeeping laws and industry standards by recording and keeping employee timesheet records.
From an employee’s point of view, this entails:
- Accurately tracking their work hours
- Submitting their timesheet on time
If an employer or company doesn’t stick to the rules of timesheet compliance, then a whole lot of gears might jam up the workspace. Some of the things that might go wrong include:
- Difficulties in payroll due to inaccurate timesheet reports.
- Disruption in project management due to inaccurate project resources.
- Issues between clients and employees due to inaccurate invoices and untimely payments.
Therefore, as an employer, you need to enforce a timesheet policy that adheres to the laws and keeps things smooth in the company’s operation engine.
FLSA Timesheet Requirements (Federal Recordkeeping)
Under the Fair Labor Standards Act (FLSA), employers must keep accurate time and pay records. The law does not prescribe a specific “timesheet” format (paper, spreadsheet, or software are all acceptable).
What employers must record (FLSA, non-exempt):
- Employee identifiers (full name, home address, sex, occupation; DOB if under 19)
- Day and hour the workweek starts
- Hours worked each day and total hours each workweek
- Total earnings (straight-time) for each day/week
- Regular rate/basis of pay and overtime hours/pay
- Additions/deductions from wages
- Total wages each pay period
- Date of payment and pay period covered
For non-exempt (hourly) employees, keep at minimum:
- Hours worked each day and total hours each workweek
- Overtime hours and overtime pay
- Regular rate/basis of pay and total wages each pay period
- Additions/deductions and pay period/payment date
(Many employers also capture time clock in/out to substantiate daily totals, but it isn’t required by FLSA.)
For exempt (salaried) employees, FLSA does not require daily/weekly hour tracking, but you must keep core payroll records (e.g., salary basis, pay period, payment dates).
Overtime: Pay 1.5× the regular rate for hours over 40 in a workweek (non-exempt).
Breaks/meals: Short rest breaks (~5–20 min) are generally paid; bona fide meal periods (~30+ min) when fully relieved of duty are not paid.
Non-compliance: Can trigger back wages, penalties, and enforcement—build a consistent, auditable timekeeping process.
Time Card Laws by State
Aside from universal and federal laws that all US companies must adhere to, there are also state laws and local business laws that employers have to take into consideration.
Most states have their own local laws, so here are a few examples:
- California law accepts paper timesheets, so there’s no need for employers to implement an electronic timekeeping system or time cards. The California Wage Orders require that employers keep accurate employee time records, and in:
- English language
- Ink on paper timesheet form
Paper timesheets work just fine when you have just a few employees, but the extra work might be overwhelming for larger-scale companies, which is why we suggest switching to digital.
- Washington law requires employers to pay non-exempt employees 1.5 times their regular wages if they have worked over 40 hours in a single week.
- The Texas Payday law requires employers to keep accurate records of payroll for every pay period. Moreover, the law also allows employers to use timesheets and time clocks to monitor employee work hours.
Timekeeping Rules and Regulations for Hourly Employees
While different countries have their own time clock rules and regulations, there are some universal regulations that all US states must adhere to in regard to hourly employees:
- The FLSA states that the timesheet records must clearly state the date and time when a worker starts work and the date and time when a worker finishes work, as well as the number of daily and weekly work hours.
- Hourly employees must be compensated for each hour they’ve worked.
- Working off the clock is illegal. If an employee is made to work off the clock, they can file a complaint to the Department of Labor or a lawsuit under the terms of unpaid wages under the Fair Labor Act.
- Clock-ins and clock-outs are rounded to the nearest quarter of an hour under the 7-minute rule.
- Employers can modify an employee’s time card without them being aware, but they have to pay that employee for all hours they’ve worked.
- Timesheet records must be kept for clock-ins, clock-outs, overtime, and employee breaks in order for everything to be in compliance with FLSA.
- Employers should make their employees wait until their shift has started before they clock in. Accordingly, employees cannot be asked to work or perform any type of work-related duty before they officially clock in and start their shift.
- The employer should decide how many hours a week an hourly employee should work. If the employee works over 40 hours a week, the employer has to pay them 1.5 times their daily wage for overtime work.
Timekeeping Rules and Regulations for Salaried Employees
Salaried employees aren’t required to track their working hours because:
- Salaried employees are entitled to receive their base pay no matter how many hours they’ve clocked in at work during the workweek.
- Salaried employees are required to complete their assigned tasks and duties no matter how long it takes them.
- Salaried employees cannot get their pay docked by their employer unless they are absent from work for a full day. For example, if an employee needs to leave the workspace after the break, then the employer cannot dock that day’s wages.
The things they have to track are:
- Time off, i.e., short-notice leave
- Vacation leave
- Holidays
- Sick-leave
- Payroll periods
- Overtime if the company allows it
Freelancers, contractors, and volunteers are excluded from the statutes of FLSA as they have their own laws regarding labor.
Timesheet Fraud (Falsifying Time Records)
If you have a business that tracks work hours with manual timesheets, then you’re running at risk of exposing your company to a few inefficiencies and inaccuracies that might violate federal and general laws regarding employee work hours.
In some cases, you can be up against employee fraud. Inaccurate timekeeping inside a company and timesheet fraud are common in companies that still use the manual system for keeping timesheet data.
Some of the timesheet frauds can be in the form of:
- Inflating work hours - where employees can manually enter how many hours they’ve worked
- Falsifying timesheets - If the data from employee attendance has to be put manually in a time card or timesheet, then it’s very easy for dishonest employees to alter these figures to suit their needs.
- Nepotism - This happens when management favors an employee and schedules that particular employee to work on specific tasks rather than other available employees.
- Various errors due to delays in completing timesheets - Manual timesheets can be a hassle and some companies are so late in filling and submitting them that employees are known to be working on timesheets for work hours they had completed months ago.
In order to minimize timesheet fraud, you, as an employer, can take some measures that will enhance your company’s time tracking capabilities and stay inside the compounds of the law, such as:
- Create a clear company-wide timesheet policy
- Use an electronic timesheet method or timesheet software
- Create a company-wide disciplinary measure for timesheet offenders. Once your employees know the consequences of committing timesheet fraud, they’re likely to fall in line and act appropriately.
By switching to a timesheet software, your company can send clean invoices, timely submitted timesheets, accurate billing reports, and so much more.
MyHours.com is a state-of-the-art timekeeping software tool that can bring any type of company into the 21st century and help businesses adhere to federal, state, and general laws regarding employee timekeeping, while making that process as simple as possible.
Timesheet Legal Requirements (FLSA) — FAQs
Are timesheets considered legal documents?
Yes – timesheets serve as official records of hours worked and are part of required payroll records under labor laws. While the FLSA doesn’t mandate a specific format, employers must keep accurate time records, so a timesheet is effectively a legal record.
Do employees have to sign timesheets?
No. There’s no federal law that requires employee signatures on timesheets. The FLSA requires accurate time and pay records but doesn’t prescribe any particular form, so signatures are optional. Many employers still require a signature or digital approval as a best practice, and some state laws, CBAs, or company policies may require it.
Can employers alter or falsify timesheets?
Employers may correct timesheets to reflect the actual hours worked, but they may not falsify records (e.g., reducing hours to avoid overtime). The FLSA requires employers to keep accurate records and pay for all hours worked; altering records to underpay can trigger back wages, civil money penalties, and other enforcement. Document any corrections and notify the employee.
How long must timesheets (timecards) be kept?
Under federal law (FLSA), keep payroll records for at least 3 years and keep records used to compute wages—like timecards/timesheets and work schedules—for at least 2 years.
What are the penalties for not keeping proper timesheets?
Failure to keep accurate time records can trigger Department of Labor investigations, back-wage payments, and in lawsuits, liquidated damages (often matching the back pay) plus attorneys’ fees. For repeated or willful violations, employers can face civil money penalties and even criminal penalties, including fines up to $10,000 and potential imprisonment for a second conviction. You may also be subject to court injunctions, audits, and additional state-law penalties or longer record-retention requirements.
