In this guide, you’ll learn how to create a compliant timekeeping policy that keeps your workflows running smoothly and simplifies your time tracking process. Plus, see real examples from three organizations, and download our free timekeeping policy template that you can adapt to your business.

What is a timekeeping policy and why is it important?

A timekeeping policy is a document that details all of a company’s time and attendance policies. It outlines the steps employees should take to track their work hours — including any specific rules for overtime, break tracking, and time off — and may also include rules for correcting any timecard errors.

A timekeeping policy ensures accurate tracking of employee work hours, which is essential for payroll processing and compliance with the Fair Labor Standards Act (FLSA).

It also:

• Promotes employee accountability.
• Minimizes disputes over hours worked,
• Helps businesses identify attendance issues.

11 details to include in your timekeeping policy

Timekeeping policies can look different for different businesses. The best policy for your business might be a short and simple one-pager or a detailed document with step-by-step instructions.

Below, we’ve listed eleven common provisions employers include in their timekeeping policies. Choose the ones that make the most sense for your business and add them to your own timekeeping policy.

1. The purpose of the policy

It’s helpful when your employees understand why you have certain policies in place. This section should make it clear that accurate time tracking is essential for timely, accurate pay checks, making your team much more likely to follow your processes. 

2. How employees should track their time

The policy should tell employees how to use your chosen time tracking method. 

• Paper timesheets: Explain where employees can find blank timesheets, when they’re due, and how to submit them at the end of each pay period.
• Punch cards: Explain where to get punch cards, how to stamp them, and any other policies (like rounding to the nearest half-hour).
• Time clock apps: Explain how employees can access the time clock, how they can log in, and whom they should contact for queries.

If your employees work remotely or at different locations, specify how they should clock in and out depending on where they are. For example, they might have to use a kiosk on site but a mobile app off-site. 

3. When employees should clock in and out

For all covered non-exempt employees under the FLSA, you need to keep accurate daily and weekly hourly records. This begins with employees knowing when they should clock in and out. Your policy should explain which breaks employees should clock out for, how long the breaks last, and how often workers should take them.

Note that being salaried doesn’t automatically make someone exempt from time tracking. See the DOL exemption guidance when drafting your timekeeping policy.

To simplify timekeeping, some employers specify work hours instead of having workers clock in and out. Ruben Medina, Head of Marketing and Sales at Koalender, shares:

“We work asynchronously, so we designed our policy to promote availability during core hours rather than strict time limits… We decided on this rather than having people clock in/out because it’s easier to manage a remote team when you know everyone is available at the same time.”

4. Rules around clocking in early, clocking out late, and overtime

Employees logging a few extra minutes before and after their shifts can increase your labor costs, so explicitly define your rules for clocking in early, clocking out late, and working overtime.

For example, you can limit how soon before a scheduled shift employees can clock in or specify that employees must get manager approval to work late.

Some time tracking apps can also help you enforce these policies. In Buddy Punch, you can prevent employees from clocking in before their scheduled shift starts or automatically clock employees out at the end of their shifts. If you use rules like these, the policy should also explain how they work.

However, these don’t remove your obligation to pay for compensable work, so your timekeeping policy should also include a correction process for work performed outside recorded times.

5. How employees should fix timecard errors

According to Cache Merrill, the Founder of Zibtek:

“It is easy to write a policy that says employees must record their hours, but that doesn’t tell someone what to do when they realize they forgot an entry… Giving them a straightforward way to flag and correct the mistake makes the policy much easier to follow.”

For example, in case of mistakes, they may have to reach out to their supervisor to request an edit to their timecard or amend it themselves. If you’re using Buddy Punch for time tracking, you can let managers edit timesheets or let employees edit their own timesheets with manager approval required for the changes. Additionally, you can require anyone who edits a timesheet to add a reason for the change for your records.

If you’re using physical timesheets, maybe you want the original entry to be struck off instead of erased, and the revised entry added right below it.

Regardless of how timesheets are corrected, the policy should clarify when and how it needs to be done. 

6. Your timesheet approval processes

If timesheets need manager approval before you run payroll, explain the steps they should take to get the signoff.

Consider who’s the best contact to sign off on timesheets. Joanne Loftus, President and Owner of Archival Designs, shares her recommendation:

“I chose to go with department leads approving timesheets as opposed to a single manager. This is because department leads sit next to their team members and therefore are able to verify whether or not someone stayed late… This individual is best suited to catch errors that payroll would never find.”

Also mention the deadline for submitting timesheets for approval to avoid payroll delays. 

7. Consequences for non-compliance

Often, timesheet inaccuracies are just mistakes. But sometimes, they can be an intentional case of timecard falsification. For example, employees may “forget” to clock in to hide the fact that they were late to work.

But even if they forget to clock in, the FLSA requires you to pay employees for work done. So you need ways to hold your team accountable.

Your timekeeping policy should specify consequences for repeated timesheet mistakes — especially if you’ve noticed, or suspect, employee time theft.

Outlining your process for write-ups and termination will help you, managers, and employees know exactly what will happen in case of recurring non-compliance.

8. Instructions for working around technical errors

What should your employees do if your time tracking system is inaccessible? This can happen if your vendor’s system goes down or if an employee doesn’t have internet access at a worksite.

Create a policy for backup timekeeping. Backups help you retain timekeeping data in case of technical issues, making it easy to fix missed punches when the system resumes functioning. 

9. Definition and examples of time theft

You may think time theft is clear-cut, but employees may not understand that what they’re doing is wrong. Your timekeeping policy should define specific examples of time theft, such as:

• Clocking in before arriving at work
• Clocking out after leaving work
• Buddy punching — having a coworker clock you in or out
• Doing personal tasks while on the clock 

10. Time off rules

If employees accrue vacation and PTO time based on hours worked, explain the accrual process in your policy. Also explain how employees should log upcoming PTO so you can include it on their schedules and timesheets.

11. Employee signature page

End your timekeeping policy with an agreement that employees sign to confirm they’ve understood the policy. This documentation can be helpful if you need to take disciplinary action later. Examples of timekeeping policies from real companies

Examples of timekeeping policies from real organizations

Let’s see how some organizations have embedded the components above into their timekeeping policies.

Southwest Tennessee Community College

Southwest Tennessee Community College’s timekeeping policy starts with a table of contents, which allows for easy navigation.

The document neatly organizes categories, starting with an overview of their timekeeping system and a description of processes. 

Then it goes into employees’ responsibilities, defining expectations for exempt employees versus non-exempt employees, and how to handle daily clock-in and clock-out, lunch breaks, and payroll adjustments.

The bulk of this policy defines responsibilities, expectations, and rules for both employees and supervisors relating to leave requests, annual leave, sick leave, compensatory time, jury duty, and holidays. 

The timekeeping policy also goes into detail on:

• Addressing time tracking system issues
• An order of contact if there’s an outage
• How employees should manage locked accounts, password resets, and lost ID badges
• Hours for full-time employees
• How the company defines and handles tardiness and absences

Lastly, it includes a disciplinary action section on behaviors that warrant consequences, like buddy punching or excessive missed punches.

Takeaways

There can be a lot of details in a timekeeping policy, and this document is a great example of how to break it into clear sections so the information is easy to find. The document also outlines procedures and expectations for both employees and supervisors.

Mount St.Joseph University

In stark contrast to the previous one, Mount St.Joseph University’s timekeeping policy is limited to just one page, yet it still covers the essentials: 

• The definition of exempt versus non-exempt employees
• Expectations for breaks and meal periods
• Processes for handling punch time adjustments 
• How to manage time tracking during system failures
• Prohibited behaviors
• Processes to raise questions or concerns

Takeaways

You can be as specific as you want in your timekeeping policy, but it’s not a requirement. If you don’t think your employees need as much detail as the last example, keep the policy short and simple.

Whirlwind Steel

The cover page of Whirlwind Steel’s timekeeping policy clarifies what employees can expect: guidelines on taking leave, compensation, confidentiality, benefits, and corrective action.

The policy starts with a letter from the CEO to put employees at ease and explain the “why” behind the policy. From there, this in-depth handbook gives employees information on: 

• Taking personal phone calls during work hours
• Holding outside employment
• Ensuring safety at the workplace

Its timekeeping-specific sections cover salary classifications, time reporting, overtime pay, paychecks, and expense reimbursement. 

Later in the policy, Whirlwind Steel also explains its paid holiday, vacation, military leave, and absence reporting rules. It ends with a detailed list of behaviors that warrant corrective action, including:

• Excessive tardiness
• Abuse of leave time
• Walking off the job during work hours
• Failure to abide by policies

According to Sofia Martinez, Owner of Sparkly Maid Austin and Cleaning Expert, it’s best to design corrective policies that empower employees. 

“It’s important for employees to feel comfortable reporting missed punches, as employees shouldn’t be fearful of getting in trouble for missing punches. But policies should also encourage employees to avoid missing punches in the first instance.”

Takeaways

This example shows that it’s possible to combine timekeeping with other business policies, giving employees a single resource for all of their questions. If you have a small business, it may make sense to combine them into a single

Free template for creating your own timekeeping policy

It can be hard to start from a blank page. We’ve created a sample timekeeping policy to help you get started. Keep in mind that this template is just a starting point. You’ll need to customize it based on your business and add details on: 

• Which employees it covers
• Clock-in and clock-out procedures
• Who reviews missed punches and approves corrections
• Timesheet submission and approval deadlines
• Whom to contact with questions

To access our free timekeeping policy:

• Download as a PDF
• View it in Microsoft Word
• Make a copy of it in Google Docs

Disclaimer: This article is for informational purposes only and shouldn’t be considered legal advice. Consult an attorney for specific guidance on the laws where your business operates.

Contributors

• Cache Merrill, Founder, Zibtek
• Joanne Loftus, President and Owner, Archival Designs
• Ruben Medina, Head of Marketing and Sales, Koalendar
• Sofia Martinez, Owner and Cleaning Expert, Sparkly Maid Austin