The Downside to Employees Not Clocking Out

For any company with employees; ensuring that they get paid on time, every time is a top priority. But when it comes to ensuring paycheck accuracy, things are a bit less black and white.

Oftentimes, workers are lax about clocking in or out on time; which can make it difficult for an employer, or the payroll department, to accurately calculate their pay with time cards. But while it may be tempting to simply dock an employee for work time that they forgot to jot down, or attempt to teach them a lesson by withholding pay; this isn’t an option.

According to Fair Labor Standards; employers must compensate employees for the hours that they worked; regardless of whether they forgot to clock in or out. The FLSA states that the responsibility of maintaining accurate timesheets for staff members ultimately falls on the employers.

While this is one reason that many companies are making the switch to web-based time tracking software, for companies that are still using traditional methods of time tracking; such as manual time sheets, or hand punch time clock software that require an employee to punch in and out; an employee that forgets to clock out can cause a world of hassle.

With this in mind, let’s take a look at a few problems that can occur when an employee neglects to clock out, and see a few steps that employers can take to help prevent this from happening too frequently.

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What Happens:

An employee who neglects to clock out can accrue dozens of hours of unearned overtime. While most human resource professionals should be able to spot obvious time clock punch errors, such as someone who was clocked in for days at a time; sometimes these mistakes can slip through the cracks. Here’s a look at what happens when an hourly employee forgets to sign out.

• Guessing Games Begin

When an employee forgets to clock out, the difficult task of determining how many hours they worked that pay period begins. You may have to take your employee’s word for it the first time, or ask one of their co-workers. In these cases, a less-than-honest employee may be tempted to exaggerate the number of hours that they worked.

• Payroll Could be Inaccurate

Since determining the accurate times is often a matter of guesswork; this could result in an employee’s paycheck being inaccurate for the workweek as well. Work hours could be inflated or even deflated, which could lead to federal law getting involved due to time theft.

• Time is Wasted

Trying to determine what time your employee actually clocked out costs time. Ensuring accuracy, checking for discrepancies, reviewing security footage to verify start time and out-time – these and other measures of tracking employee hours add up.

What to Do:

While the Department of Labor’s Fair Labor Standards law says that employers must compensate all employee time worked, this doesn’t mean that employers should let this issue slide. An employee that neglects to clock out should be held accountable, and steps should be taken to help prevent it from happening again. Here’s a look at a few things that employers can do to help curb the issue of neglecting to clock out.

• Have a Written Policy

The first step toward ensuring that your team remembers to log in and out, on time, is by making sure your company’s policies require them to do so. Make sure these rules are clearly outlined in the employee handbook.

A policy can also help you to protect yourself, since you’ll be able to follow a written procedure; with escalating consequences (starting with warnings and infractions and growing more severe) that your team is aware of thanks to their employment contract. Ensure that all of your employees have read and signed this policy. They should know their employee’s rights, and you should know yours.

• Emphasize the Importance of Clocking Out

As an employer, it’s important to ensure that your team understands the importance of on-time attendance and the importance of clocking in and out on time. You may want to encourage your team to set email reminders to avoid missed punches, or to put alarms on their phones to remind them to sign in, or out (for lunch breaks or at the end of the day). You can even consider offering incentives for when employees clock in or out on time for an extended period. Remember, according to federal labor laws and state laws, the need to account for every hour spent mostly applies to non-exempt employees.

Finally, make sure your team understands the benefits of remembering to clock in and out on time. Improved efficiency, payroll accuracy, and access to current time records are just a few benefits. No one should feel temped to add extra hours to their total hours worked for a workday.

• Have a Disciplinary Procedure

While it’s inevitable that every once in a while, someone will forget to clock out, it’s important to implement procedures to prevent it from becoming a regular occurrence. If an employee neglects to clock out multiple times in a short time frame, you may want to take disciplinary action. A disciplinary procedure could involve a verbal warning, followed by a written warning, and ending in possible termination.

Consider a Web-Based Time Clock System

Finally, a web-based timekeeping system is the best way to help curb attendance problems. According to the American Payroll Association (APA), the average employee takes anywhere from 50 minutes to 4.5 hours per week by arriving up late, leaving early, and taking extended breaks. Using a web-based time clock is the best way to ensure payroll accuracy; by helping to do away with these types of exaggerations.

It is important to remember that the Fair Labor Standards Act puts the responsibility of time keeping on employers and requires you to pay your employees for the hours worked. While it’s vital that your employees receive a fair wage, though, this doesn’t mean that it has to be at the expense of your company. With the above tips, you’ll be able to confirm payroll accuracy, while at the same time ensuring that aren’t losing money by paying employees for hours that weren’t worked.

We built Buddy Punch to serve as a strong employee time clock app, with specialized features to make it easy to keep employees accountable, simplify scheduling, and streamline payroll. Learn more about Buddy Punch by clicking here.