How to Track Employee Time: 6 Effective Methods

ByEric Czerwonka Last Updated

Running a profitable business can be unstable, complicated, and random. Many companies find themselves at the mercy of factors that are completely out of their control. This is why it’s critical to have clarity and control over as many aspects of your workforce as possible, including tracking your employees’ time.

In this post, we’re going to walk you through everything you need to know how to track employee time, including why it’s important, what factors influence it, and what your many different options are.

Why tracking employee time is important

Tracking employee time is important for several different reasons:

  • It’s required by federal law. The FLSA (Fair Labor Standards Act) states that employers are responsible for keeping accurate time records for employees. This includes their hours worked and wages earned.
  • Keeping records is also required by federal law. Employers are required to maintain records for at least three years, including time cards, work schedules, and reductions from wages.
  • It ensures that employees are paid accurately for their work. Inaccurate timesheets can hurt employers who pay for work that wasn’t done, but it can also negatively impact employees who aren’t accurately compensated for every task they complete. 
  • It provides insight into job and project costs. Knowing how much time it takes your employees to complete tasks is a critical component of creating effective project plans and budgets. 
  • Time tracking ensures invoices are accurate. In some cases, timesheets can even be used directly to provide proof of work to clients and customers.

Do you need to track time for your employees?

Whether or not you need to track time for your employees will depend on the type of employees you have: hourly vs. salaried and exempt vs. non-exempt.

  • Hourly employees: Hourly employees are employees whose pay is determined by the amount of time they work. The FLSA requires that employers keep an accurate record of time worked for hourly employees.
  • Salaried employees: Salaried employees are employees who are paid the same amount every pay period regardless of how many hours they work. In most — but not all — cases, the FLSA does not require you to track time for salaried employees.
  • Exempt employees: Most salaried employees are designated as exempt, which means they are not eligible for overtime pay. While you can track hours for salaried, exempt employees if you want to, it is not required by law.
  • Non-exempt employees: In some cases, salaried employees can be designated as non-exempt, which means they do qualify for overtime pay. The classification is tied to both the amount of money the employee makes per week and the specific responsibilities of their role. Here’s a page from the U.S. Department of Labor explaining what criteria qualify an employee as exempt or non-exempt.

In summary, employers must track time for hourly employees and non-exempt salaried employees because their pay is determined either entirely or in part by the number of hours they work. You do not have to track time for salaried, exempt employees unless you want to because hours worked has no impact on their pay.

How to track employee time: 6 methods to consider

Whether you’re tracking time because you’re required to or tracking time because you recognize the potential benefits to your business, there are several different time-tracking methods you can use, each with their own pros and cons. This rundown should help you weigh the benefits and disadvantages of each as you consider what time tracking method to implement in your workforce.

1. Mechanical punch clocks

Mechanical punch clocks are old-school machines that “punch” employees in and out of work by printing timestamps on paper time cards. 

Pros

  • Accuracy: Punch clocks improve the accuracy of timekeeping by printing the exact time employees punched in/out of work.
  • Simplicity and ease of use: Employees simply insert the card and let the machine do the rest.

Cons

  • Employees can lose track of time cards.
  • They’re vulnerable to time theft. Employees can punch in for each other to hide tardiness or absences.
  • Any malfunction will slow down employees and call accuracy into question until remedied. 

2. Paper timesheets

Paper timesheets are physical data tables that employees can fill out with details about their time worked on the clock. 

Pros

  • Paper timesheets can be filled in it any time and corrected if an employee makes a mistake.
  • They’re cheap, low-maintenance, and simple.

Cons

  • They’re vulnerable to time theft. Employees can simply lie about the time they clocked in or clocked out if they want to hide absences and tardiness.
  • Time cards can be lost or damaged.
  • Time cards are vulnerable to human error, such as employees putting the wrong start and end times by accident, logging project times incorrectly, or simply writing with illegible handwriting. 

3. Spreadsheet timesheets

Spreadsheets are a more modern update to paper timesheets. These can be either printed or digital (hosted online or on apps such as Microsoft Excel or Google Sheets). Like paper timesheets, they allow employees to log their hours, and the built-in functions of spreadsheets make calculating total hours easier. 

Pros

  • Most spreadsheets have a change history log, making it easier to track who entered what information and when.
  • These are a low-cost method of keeping time for employers.
  • Employees can easily correct mistakes if they catch them prior to running payroll.

Cons

  • Spreadsheets are still vulnerable to time card manipulation such as covering up time theft by lying about start or end times.
  • While they aren’t vulnerable to illegibility, spreadsheets are still prone to human error in the form of typos and mistakes in data entry. 
  • Tech-savviness of employees can cause issues in reporting accuracy and timing.

4. Time clock apps

Time clock apps are digital time tracking methods that function on electronic devices, such as Windows and Mac desktops, iOS and Android smartphones, and iOS and Android tablets. These tools come with a variety of different features.

The different types of time clock apps

  • Basic time clocks: For the most part, basic time clocks are just timers or stopwatches that are designed to help individuals manage their time better. They can be used in conjunction with paper timesheets or spreadsheets to allow team members to record how much time certain tasks take.
  • Project management time clocks: These time clocks have a specific focus on managing project time and job costs. As such, they offer ways for employees to track different assignments throughout the day so that employers can review and dive deeper into the data.
  • Workforce management systems: These time clock apps have a focus on empowering business owners in the coordination and management of their workforce. They come with varied functions — from time and attendance tracking to scheduling, payroll, and more — all designed to improve some aspect of business management.
  • Industry-specific solutions: These tools tend to be made with specific industries in mind, often by former or current workers in those fields. Their specificity makes them less popular, but to make up for it they feature functions that address niche pain points.
  • Biometric time clocks: Biometric time clocks are the ultimate solution to time theft in the workforce. They contain many of the standard time tracking functions, but also use biometric data, such as facial recognition or fingerprint scanning, to ensure that employees are who they say they are.
  • GPS time clocks: GPS time clocks use GPS monitoring features, such as GPS tracking or geofencing (designating an area on an interactive map for clock ins and outs) to monitor employees. These tools make it so that field workers can still be held accountable for their time and attendance.
  • Automatic time clocks: These time clocks contain any number of automatic, set-and-forget features that relieve the burden from employees while capturing data, circulating to other functions, and ensuring that employers can count on accuracy in reports.

Pros

  • Many of these tools come with automatic features that reduce the burden on your employees.
  • They’re incredibly flexible, working on mobile devices as well as desktop devices.
  • Most of them update any captured data in real-time, allowing you to review information or make changes at will.

Cons

  • These tools often charge subscription fees.
  • Depending on the simplicity of their design, there can be a learning curve for employees.

5. Mountable time clocks

Mountable time clocks are a modern update on physical punch clocks. These tools have more features that make them more attractive, such as integrating with time clock software and having options such as facial recognition or ID card readers for clocking in/out.

Pros

  • They’re more flexible and less manipulatable than their mechanical counterparts.
  • They can integrate directly with time clock software.

Cons

  • These time clocks are expensive, costing hundreds or thousands of dollars per device.
  • Many of these devices also have monthly subscription costs in addition to the cost of the device.

6. Portable time clocks

Portable time clocks can be set up in different locations at will, allowing them to be moved from location to location. They can be physical time clocks designed for certain applications (like being used on construction sites) or mobile time clocks on either crew members’ devices or established in a central location as a kiosk.

Pros

  • These time clocks offer flexibility in how they’re used and where.
  • In the case of portable time clock apps, they can integrate directly with your desired payroll software for easy transfer of employee data.

Cons

  • Physical portable time clocks can be lost or damaged while on job sites.
  • Physical portable time clocks are also expensive, in some cases costing hundreds/thousands of dollars.

Best practices for tracking employee time

Implementing employee time tracking can be as beneficial for both you and your team members, but there are some common concerns and best practices to consider in the process.

  • Make it clear that this is not about micromanagement. No employee wants to feel like you’re going to be hanging over their shoulder, constantly pressuring them to optimize every second they spend on the clock. Your time tracking is just about getting deeper insight into your business, trying to optimize your workforce management, and enforcing your attendance policy.
  • Make it clear this is not invasive. Employees have very understandable privacy concerns when it comes to time clocks that monitor them throughout the day. For example, GPS tracking on mobile devices can make employees fear they’ll be constantly monitored. The truth is that time clocks only monitor while on the clock and completely cease monitoring outside of that timeframe.
  • For longevity, find the intersection between simplicity and functionality. You don’t want to pick a method of tracking time that is incredibly effective but requires a ton of training and troubleshooting for your team members. Try to find a method that’s intuitive without losing effectiveness.
  • Play around with customization. Many of these various time tracking methods have different features that you can enable at will. Try them out and see what new technique might be worth adding to your time tracking arsenal.
  • Be open to feedback. What do your team members like about these tools? What do they dislike? What are their concerns? Ultimately, you want to find a time tracking method that works best for everyone.
  • Update your attendance policy.  Your chosen method of tracking employee time should be outlined in official company documents, including a description of how you expect team members to use it. 

How to choose the right time tracking system for your team

There is no one-size-fits-all solution to time tracking that will work for every business owner and their team. Finding the best time tracking system for you may come down to trial and error. That said, it’s our opinion that the vast majority of business owners would be best served by switching to time clock apps.

The sheer flexibility, portability, and simplicity of time clock apps means that any business owner can get full use out of them. They can track remote workers, can be established on-site as a kiosk, and turn any device into a capable time tracking tool. Their main downside is having subscription fees, but the tine and money they help business owners save makes up for it.

There are many different time clock apps on the market that fulfill different roles (which is another example of how flexible they are). Here’s a quick primer on some of the best ones:

  • If you’re looking for an all-in-one tool to help you manage all things time tracking, employee scheduling, and payroll, you can’t go wrong with Buddy Punch. This time clock app is known for its diversity of features, affordability, and intuitive design.
  • If you’re after a time tracking method that can specifically help you boost the productivity of your team members through activity level monitoring and idle time tracking, you may prefer Time Doctor. 
  • If you’re particularly concerned with the financial side of your business and would love to have access to information such as project estimates vs. actuals and a project activity feed, QuickBooks Time might be the tool for you.
  • If all you want is a simple tool with limited features, When I Work‘s scheduling, time clock, and team messaging might be all you’re looking for.
  • Lastly, there’s always the option to look into time clocks built specifically for your industry. For example, construction business owners have Procore or Fieldwire, and restaurant business owners have 7Shifts or Fourth.

Regardless of what method of time tracking you pick, it’s important to ensure it’s something that is actively helping you optimize your workforce and attain greater profitability. There are too many effective options for tracking employee time to settle for anything less.