How to Create a Timekeeping Policy + 3 Real Examples

What’s your business’s approach to timekeeping?

If your initial response is that you have your employees clock in, clock out, and record their breaks, you’ve got the right start, but you might not be as thorough as you could and should be. For example, take a glance at these questions:

• How do you monitor your employee hours to ensure accuracy (as required by law under the Fair Labor Standards Act (FLSA)?
• What happens to your timekeeping process when employees need to work remotely?
• How many breaks do your team members get, how are they meant to measure them, and who holds them accountable if they go over the allotted time?

If you (or your team) can’t answer these questions easily, you may have a timekeeping policy issue.

The goal of this post is to guide you through creating a timekeeping policy that improves employee engagement, optimizes your company’s workflow, and simplifies your time-tracking process — all in accordance with federal and state labor laws.

What is a timekeeping policy?

A timekeeping policy is a company document that outlines definitions, processes, and goals for your employees to manage their working hours. These documents are as useful for your employees as they are for you and your administrators since they outline a set of guidelines to be followed to ensure consistency in rules and procedures.

Your timekeeping policy should also include instructions for how time tracking is meant to be handled in your workplace, whether it’s through manual paper timesheets, on tools such as Microsoft Excel or Google Sheets, or through automatic timesheet software.

The benefits of having a timekeeping policy

Taking the time to create an effective timekeeping policy pays off in multiple ways for business owners and their employees alike. Here are just a few of the most common highlights.

• The Fair Labor Standards Act (FLSA) sets recordkeeping requirements for employers, in addition to minimum wage and overtime pay standards. All three of these requirements are met through having a thorough timekeeping policy in place.
• Having clear guidelines on work hours and breaks provides a level of organization that can help team members focus more intently on task completion, improving efficiency and productivity.
• Timekeeping policies often include rules for how overtime work should be handled, which can make overtime hours easier to control. This is a huge asset since one and a half times pay can quickly add up and cut into profit margins.
• Human error can impact payroll processing to the point where it impacts employee wages, potentially risking legal issues. Having a systematic approach outlined in your timekeeping policy can drastically reduce these errors for more accurate payroll processing. 
• A clear process for time tracking can reduce the odds of any disputes between employee work hours versus paid wages arising and can provide documentation for proper handling of hours and fees to avoid disputes altogether.
• Outlining attendance policies and how timekeeping is meant to be handled by staff members can cut down on tardiness and provide clear rules to point to in cases where employees fail to meet punctuality standards.
• A timekeeping policy helps establish rules for special scenarios, such as if you have remote workers on construction sites, allow hybrid work, or manage virtual teams. 

Things to include in a timekeeping policy

Timekeeping policies are ultimately very flexible in what they look like (as we’ll demonstrate later) but here are a few common things to include while creating one from scratch. 

1. A description of your workplace’s timekeeping method

As you create a timekeeping policy, hopefully as a foolproof document that will serve as a base over the years, it’s time to think critically about the method of timekeeping you’ll be implementing for your team. The most important question to ask yourself is why you believe your chosen method is the best timekeeping method for your team.

• Manual methods of timekeeping (paper timesheets and time cards) are particularly popular because they’re free, but they’re also inaccurate and exploitable, making them ample targets for time theft.
• Physical time trackers like manual card readers or fingerprint scanners have better protection and data accuracy, but they can also be exploited and tend to be expensive, costing up to $1000.
• Time-tracking software is known for being flexible, affordable, and capable of monitoring on-site and off-site employees with real-time data, but some business owners chafe against paying subscription fees.

Whatever method you decide on using, we suggest you think about efficiency, accuracy, and the long-term timekeeping implications if you were to never change it in the future.

2. How employees should record work hours and days

Include a description of how employees are meant to record expected work hours as well as standard work days (i.e., stating that employees are expected to work from 9:00 AM to 5:00 PM as scheduled from Monday to Friday and that any deviations from this work schedule must be approved by a supervisor).

3. How employees should record breaks

Make sure to include (and follow the state laws and federal laws for) the recording of any breaks included in your employees’ schedules. 

Note: The FLSA does not require lunch or coffee breaks. However, if you choose to offer them — as most sensible employers do — there are rules stating that short breaks are compensatable work hours, while meal periods, which serve a different purpose, are not work time and thus not compensatable.

4. How you track holidays and PTO

Your timekeeping policy should detail how holidays and paid time off (PTO) are meant to be handled — from how paid time off hours will accumulate, to how time-off requests should be submitted, and finally covering how they should be documented by team members and administrators to ensure accurate time records.

5. How you track overtime

Make sure you include how your company will handle overtime, which is required by federal 

labor laws to be compensated at a minimum rate of one and a half times their regular rate of pay for hours exceeding 40 in a single workweek. 

You will also want to detail that non-exempt employees are eligible while exempt employees do not qualify for overtime at all. Make sure to include how the number of hours is meant to be recorded if you aren’t relying on automatic time-tracking software to handle these calculations for you.

6. How timekeeping rules are enforced

Here is where you should detail how your timekeeping rules apply to each employee, as well as the penalties for infractions. The goal is to provide an additional level of motivation for employees to adhere to the policy as outlined. 

You are welcome to include a progressive disciplinary action section here, clearly outlining what happens for each consecutive instance of noncompliance.

7. How employees should submit timesheets

Use this section to detail exactly how employees are meant to submit their timesheets for payroll at the end of each work period. We’d recommend using a timesheet app to simplify the process, but either way, you want to be explicit about how employee data is meant to be saved.

3 real examples of company timekeeping policies

What the perfect timekeeping policy looks like will depend on your business. Thankfully, these documents are highly flexible and can be shaped to your business’s brand, style, and voice. 

Let’s take a look at a few template examples and examine how the authors chose to communicate their policy.

1. Example 1: Southwest Tennessee Community College

This first timekeeping policy starts with a table of contents, which allows for easy navigation on repeat viewings. Categories are neatly segmented, starting with an overview of their timekeeping system and a description of the procedures for it — defining “clock in” “punch in” and “swipe in” (or out) as all interchangeable phrases, defining employee roles, and describing the tasks.

Then it goes into the employees’ responsibilities, defining expectations for exempt employees versus non-exempt employees, and how to handle things such as daily clock in and clock out, lunch breaks, and how to make payroll adjustments (including emailing their manager or supervisors detailing why an issue occurred so the edit can be documented for time records).

From there, the bulk of this timekeeping policy defines responsibilities, expectations, and hard rules for both employees and supervisors for all things relating to employee time: leave request approvals, annual leave, sick leave, compensatory time, jury duty, and holidays. This includes accrual rates of PTO for exempt and non-exempt employees and the carry-over rules between years. 

Then we get a section pertaining to time tracking system issues, such as if their time clock system malfunctions or suffers a power outage. An order of contact is established, with employees contacting their manager or supervisor, their manager or supervisor contacting payroll, and payroll contacting information systems if required. 

They also provide information for contacts to deal with accounts locked, password resetting, or ID badges being lost or damaged.

This timekeeping policy then shifts into an overview of attendance on a daily basis, defining regular work hours and work days, the amount of time full-time employees are meant to spend working per week, and how tardiness and absences are defined and should be handled. 

Lastly, there is a disciplinary action section covering the sort of behavior that would be punished, including tampering with timekeeping hardware or software, buddy punching (punching in for another employee), failing to use their timekeeping system properly, falsification of time records, and excessive missed punches without a valid reason.

General takeaways from this timekeeping policy

• Detail: This timekeeping policy was meant to answer any and every question an employee might have in regard to how their time is spent on the clock.
• Digestibility: This timekeeping policy makes sure to break down sections into chunks and also make the information contained in each section as digestible as possible. This goes a long way towards making sure the most important information is absorbed.
• Clarity: Both employees and administrators have procedures outlined for them in this policy, which helps define expectations for both roles and improves consistency and impartiality. 
• Revisitability: Particularly because of the inclusion of a table of contents (which is not always included and may not even be that useful depending on the length of your timekeeping policy), this document is easy for an employee to revisit whenever a specific question or issue arises. 

2. Example 2: Mount St. Joseph University

This timekeeping policy is a stark contrast to the previous one, which just goes to illustrate just how variable a policy can be depending on your style.

While this timekeeping policy is limited to just one page, you might notice that it does still cover the broad strokes of the information contained in the previous ten-page example:

• Employees are expected to accurately report time.
• Expectations for breaks and meal periods are included.
• Procedures for handling issues with adjustments to punch times or time recordings during system failures.
• Attitudes towards tardiness and absences.
• Prohibited behavior, such as failing to report time worked or falsifying time records.
• How to handle questions, concerns, or issues. 

General takeaways from this timekeeping policy

• You can be as specific as you want, but it’s not a requirement. Though this timekeeping policy makes no mention of the specific time employees are meant to work, that information is likely given to them outside of this document and thus is not necessarily required here.
• Being more general makes this policy slightly less valuable to refer back to. Touching on the timekeeping procedures in general is a solid enough start for employees early on in the onboarding process, but other than that, this policy doesn’t provide much value for troubleshooting other than pointing employees in the direction of who to refer to.

3. Example 3: Sitel

This timekeeping policy’s opening is closely intertwined with their specific timekeeping system, Kronos. It covers how users are meant to use the Kronos system to clock in and out depending on if they’re an hourly employee or a salaried employee, whether they’re using the kiosk or the time clock or the workforce timekeeper, or if they’re using the pay-from-switch option. 

Then, it moves into an overview of how all users are meant to access the timekeeping system in general, reporting any difficulties while the team member (or “associate” in this workplace) and their supervisor review and approve all time cards each day, ensuring accuracy each pay period. 

They also mention that in the case of outages, a backup manual timesheet method will be used. The timekeeping policy provides guidance on how to correct data for missed or incorrect punches.

Then the policy describes the procedure for hourly associates to clock in, including the fact that they’re expected within five minutes of their scheduled shift start to be in accordance with the attendance and punctuality policy. 

The next section covers daily clock-in and clock-out responsibilities. From there, it moves to how work shifts, lunches, and breaks are meant to be handled, including time allotted.

The third page then focuses on the mechanics of recording work time and ends with corrective actions, AKA disciplinary actions, for failure to adhere to the use of the timekeeping system as outlined.

General takeaways from this timekeeping policy

• If you’re committed to a particular time-tracking system that you know works great for your company, you can shape your timekeeping policy around it. This includes guiding employees on how to interact with that system specifically and across various methods.
• Being specific in what constitutes tardiness and absence can help ensure that employees are present and productive while on the clock. 

How time-tracking apps help you enforce your timekeeping policy

Your timekeeping policy can be as detailed as you want it, but just because you outline your guidelines doesn’t guarantee that employees will follow them. That’s why we suggest employers really think about the time-tracking method they’re relying on before they shape a timekeeping policy around it.

While manual methods of timekeeping may be cheap, they have no way to help enforce your rules about accurate time tracking. Physical time clocks are better in this regard, but those can be cheated and falsified, such as when one employee punches in for another, which can also violate your timekeeping policy behind your back.

One better way to help ensure your time-tracking system and your timekeeping policy are aligned is to make use of time-tracking apps that can fully enforce the sort of timekeeping behaviors you outline in your timekeeping policy. For a clear example of this, look no further than Buddy Punch.

Buddy Punch augments timekeeping

Looking at the previous three examples of timekeeping policies, there’s a clear pattern that emerges:

• Timekeeping policies enforce how employees are meant to accurately record work hours so that both employers and employees are in accordance with the FLSA.
• Timekeeping policies are meant to dissuade inaccurate timekeeping and falsifying time records.
• Timekeeping policies are meant to account for the diverse ways an employee might record their time to account for location changes, system outages, or hybrid work. In other words, they’re meant to encourage flexibility.

Buddy Punch helps with all three of these distinct categories, thanks to the automatic time-tracking features it includes. Consider how much easier it is to enforce a timekeeping policy with features such as:

Simple clock in / clock out

Using Buddy Punch is easy for employees, regardless of how tech-savvy they are. Once they log in, they’re presented with a simple UI that prompts them to clock in, clock out, and view or submit their timesheets. There are no other distractions stopping them from getting to work.

That said, this simplicity doesn’t limit your employees. They’re still capable of requesting time off, submitting requests to correct any clock-in mistakes, and viewing their estimated pay. We simply relegated those features to the background to streamline the day-to-day timekeeping process.

Geofencing

Buddy Punch’s geofencing feature allows you to ensure that your timekeeping policy is obeyed even at remote locations, without requiring your physical presence. 

With this, you can create a radius of up to 5,000 feet (called a geofence) on an interactive map. Whenever your team members attempt to clock in or clock out while outside a radius, they’ll be denied.

GPS tracking

Buddy Punch offers GPS tracking with two distinct options depending on your preference. Either you can have employee locations marked at the moment they clock in or clock out on a map, or you can keep real-time GPS tracking active for the entire time they’re on the clock. 

Either way, you’ll be able to ensure that employees are working where they’re meant to be in accordance with your timekeeping policy even while they’re remote (or you or your administrators are). Once they clock out, Buddy Punch ceases tracking any data to preserve employee privacy.

Punch rounding

Buddy Punch allows you to establish automatic punch rounding, rounding employee punches up, down, or to the nearest predetermined interval. You can set this feature anywhere from two minutes to 30 minutes. 

This is especially useful if you’ve set up Buddy Punch as a kiosk at the front of your company, or to establish a habit of employees always clocking in and out within five minutes of their scheduled start and end times.

Automatic breaks

Use the automatic breaks feature to automatically deduct time from employee time cards in accordance with your timekeeping policy. You can establish break rules, specify how many hours before they trigger, and how long the break time lasts. 

Assign these automatic break times to employees at will. For example, if Jane has a habit of making 30-minute lunch breaks last 38 minutes, you can use this feature on her alone as part of your corrective actions.

Punch limiting

Ensure employees are clocking in within a certain amount of time for their shift and eliminate the possibility of employees clocking before they’re scheduled, costing you for their unplanned hours. 

You can either establish that employees can only clock in within a certain amount of time while they’re scheduled or set it up so that employees can only clock in or clock out within a certain amount of time on any given day.

Facial recognition

Buddy Punch works with Face ID to require that an employee clocking in or out present their face to be compared with a photo on record. This feature drastically reduces time theft in your workplace, ensuring that employees are who they claim to be when they log work hours — no need to worry about buddy punching.

Customizable reports

All of the real-time employee time data that Buddy Punch gathers for your team members can be accessed at will through customizable reports. You can also export them in PDF, Excel, and CSV format. 

Easily visualize and analyze data relating to payroll, task and project hours, daily hours, and more. Click here to view the various timekeeping records and reports you can generate with Buddy Punch.

The bottom line

Creating a timekeeping policy is a flexible process that allows business owners to take whatever tactics best fit their style. What’s most important is making sure you have a clear idea of what you want timekeeping to look like in your business, and then taking care to communicate that as thoroughly or briefly as you want. 

That said, you want to make sure your timekeeping policy is something that can reasonably stand the test of time, requiring limited edits from you while being effective enough for employees to refer back to. 

The goal of a timekeeping policy is to establish rules for timekeeping and encourage employees to follow them. Using effective and accurate timekeeping software helps ensure employees stay on track, empowering both you and your team members with easy-to-use time tracking and attendance options.

FAQs (Frequently Asked Questions)

Do I have to make my timekeeping policy long and detailed?

Not at all. It can be as short as one or two pages. In fact, it may benefit you to start out this simple, as you can always add more to it over time.

Do I have to alert my employees when I make changes to the timekeeping policy?

No, you are not required to alert your employees by any law. However, it’s a good idea to keep them apprised of changes so they can better meet your expectations for timekeeping.

How can I make sure my employees report their actual hours worked with complete accuracy?

Detailing the process you want them to follow is a good way to achieve greater accuracy with total hours worked, but ultimately using time-tracking software with automatic options to enforce rules is the best way to get an accurate sense of time usage in your workplace.