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.
Timesheet Legal Requirements
In order to comply with the FLSA, your timesheet document has to include the following information:
- Personal information, such as the employee’s full name, home address, occupation, sex, and birth date for employees under the age of 19.
- The day and hour when the workweek starts.
- The total hours worked per workday and workweek.
- The total earnings for each workday and workweek.
- The hourly pay rate for overtime work.
- Total overtime for the workweek.
- Deductions from or additions to the wages.
- The total wage paid for each pay period.
- The date of payment and pay period.
Now let’s dive into the different timesheet law requirements in more detail.
Timesheet Federal Law Requirements
The timesheet federal law states that every company is obliged to keep accurate records of employee work hours for hourly and non-exempt and exempt salary-employed workers.
These records should include:
- The total hours worked per day
- Clock-in and clock-out times
- Breaks and mealtimes
- Overtime hours
- The total amount of paid wages
- And other conditions of the company’s timesheet policy.
Moreover, the federal law requires that hourly employed workers should receive overtime wages 1.5 times above their hourly wage for workweeks that exceed 40 work hours. On the other hand, although the law doesn’t require you to track employee meal periods, employees should be paid for breaks that are shorter than 20 minutes and mealtimes shorter than 30 minutes per day.
When a company fails to adhere to the FLSA timekeeping requirements, it will be subjected to penalties and fines. This is why it’s of utmost importance that the company devises a system to collect timesheet data.
Timesheet General Law Requirements
Employers must follow the recordkeeping requirements imposed by FLSA. The act establishes and regulates the minimum and overtime wage, the recordkeeping, and the standards for youth employment. FLSA applies to:
- Local employers
- State employers
- Federal government employers,
- Union halls,
- Health care employers,
- Public agency employers,
- School employers,
- And other types of private employers who have interstate companies or those that gross over $500,000 USD annually.
All of these businesses must comply with the timesheet policies and legal requirements imposed by the FLSA. Please note that different states might have their own additional laws and regulations regarding wage and hour laws.
In addition to keeping timesheets records, employers must keep employee records that include their name and surname, social security number, address of residency, and their annual salary.
State Timekeeping Laws
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.
Time Tracking 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: