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Clocking In and Out: Best Practices for Your Business

Time tracking is an essential business practice, especially if you have lots of hourly employees. Without consistent employee clocking in procedures, pay can be inaccurate, or employees might miss out on overtime pay. You have multiple options when deciding how you’ll track your employees’ hours. Explore considerations when establishing a clocking in and out policy and options for tracking employee time.

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Why you need a clocking in and out policy

If you have employees who clock in, you need a clock in and out policy to track their time.

Tracking time is important for many reasons, including:

  • Accurate payroll: Having a procedure for tracking time ensures your company payroll is accurate. The policy helps employees understand the procedures and carry them out correctly so they get paid properly.
  • Fraud prevention: Creating a time clock punch in and out policy can help minimize attempts to get paid for more hours than an employee works. Establishing strict procedures can prevent employees from falsifying their time.
  • Consistency: A written policy ensures all employees track their time the same way for consistent record-keeping. 
  • Employee tracking: Clocking in and out makes it easier to keep track of where employees are at any given time. This can be important in an emergency when you need to account for all your employees. It can also help with coverage to see who’s available. 

Considerations for establishing a clocking in and out procedure

Time clock policies for employees help establish the expected procedures. Several factors can go into developing your policy.

When deciding on a clocking in and out structure, it’s important to consider the following:

  • Industry: Some industries still use manual clocking in and clocking out procedures, such as time clocks or paper timesheets, because that’s easiest for their business structure. Others prefer mobile-friendly options to support employees who don’t work in one place.
  • Location: Your company may have some employees working in a central workplace, some working remotely and some at a separate office. If your employees are scattered, a digital clocking in and out system may work best. 
  • Compensation: Salaried employees are expected to work a certain number of hours each week in exchange for a set pay rate. It may not be as important to track their specific hours as it is for hourly employees who earn a wage based on the number of hours they work. 

Related: How to Calculate Overtime Pay

Methods for clocking in and out

You have several options for tracking employee hours. Some companies use one method for all employees, while others use a combination of methods to meet the needs of different positions.

Consider these common options when determining which is best for your organization: 

  • Digital portal on-site: An on-site digital time clock is an online tool that employees have to access from their workplace. It saves time and avoids human error, but it requires employees to clock in at work in person.
  • Physical time clocks: A physical time clock uses an employee code or time card to track when the employee arrives and leaves, so it’s best for workers who consistently work in the same place. 
  • Timesheet forms: Timesheet forms are physical pieces of paper that the employee fills out and turns in to their payroll manager, usually on a weekly basis, to track their hours. 
  • Mobile digital portal: Mobile digital portals are similar to on-site digital portals, but employees can access the system on their phones from anywhere. 
  • Biometric time clock: Biometric time clocks are similar to physical time clocks, but they scan the employee’s fingerprint to confirm their presence before clocking them in.

Best practices for tracking employee hours

Tracking employee time can seem overwhelming and time-consuming. Use these best practices to help you effectively and efficiently track your employees’ hours: 

1. Provide notifications

If you’re using digital software, activate and implement built-in notifications to help employees remember to clock in and out. This is especially helpful for remote employees or employees who work out of the office on job sites. 

2. See real-time workers

Consider using a program that allows you to see who’s currently on the clock and who’s on a break or clocked out for the day. You’ll know who you can contact with a question or project without bothering employees who aren’t currently working. 

3. Avoid unexpected overtime

Some programs allow you to cap employee hours, keeping employees from working past their weekly limit and accruing unexpected overtime. In most cases, you and the employee should receive a notification alerting you that the employee needs to clock out and go home before hitting overtime. 

4. Keep employees honest

Using a biometric time clock can help keep employees from clocking one another in, known as buddy punching. If you’re concerned about time theft or employees staying clocked in when they’re not working, consider using this type of time-tracking device. 

5. Know when employees are late

Use the information from employee timesheets to see who’s regularly early, on time or late. You can meet with employees who struggle to arrive on time to find a solution that works for everyone. 

6. Ensure everyone tracks their time

Consistency is essential when tracking time. Ensure all employees check in and out according to your established policy. Review the data regularly to ensure everyone is being consistent.

7. Offer training

Provide training on how to use your time tracking software or mechanism. When employees feel empowered and educated to use the equipment themselves and know when they should be clocking in and out, they’re more likely to do it correctly. 

8. Make it easy

Make the clocking in and clocking out procedures as straightforward and simple as possible. For those who work in an office and must clock in at a central computer or time clock, place it by the employee entrance. If you have workers who check in on their mobile devices, send reminders to clock in and out and allow them to stay logged into the program to save time. 

9. Record daily

Train your employees to track their time every day. By the end of the week, it can be a challenge for employees to remember how many hours they worked, when they ate lunch and when they took breaks. Daily tracking ensures accuracy. 

10. Review the data

Regularly review the time data you have. You may discover your employees are regularly working overtime, which means it might be worthwhile to hire an additional team member. Conversely, you might see that employees are often getting sent home early, meaning you might need to reduce your workforce. 

11. Assign a manager

Ask managers to review their team’s timesheets or digitally tracked time weekly to ensure the data is accurate and that employees are completing their timesheets. This will help your payroll team trust the data and prepare paychecks without taking time to meet with every member of the company regarding timesheet discrepancies. 

12. Use geo-tracking

Some digital and mobile timesheet software allows you to place geo-fences around work sites or offices. For employees who regularly travel from place to place during the day, you can set the software to automatically clock the employee out when they leave a work site to ensure they don’t forget. 

13. Assign breaks

Some timesheet software allows you to set specific break times and lengths for your employees to ensure they’re taking required breaks throughout the day. For example, if you allow your employees 1 hour for lunch, the timesheet program won’t let them clock back in until they’ve used their entire break. 

You have many traditional and digital options for tracking employee work time. Choose the clocking in and clocking out procedure that best supports your needs and the type of work your employees perform. 

Frequently asked questions about clocking in

Who is responsible for tracking time?

It’s ultimately each employee’s responsibility to track their time correctly. They should get into the habit of clocking in and out regularly, based on your established policy. If they forget to clock in or out, they should report it to the HR department as soon as they realize the mistake so it can be corrected.

What should you include in your clocking in and out policy?

When creating a clocking in and out policy, include details on how to use the time-tracking method and other expectations. This might include:

  • How early can an employee clock in before their shift starts
  • What to do if they forget to clock in or out
  • Procedures for clocking in and out
  • Whether they need to clock out for breaks
  • Consequences for not clocking in and out
  • Consequences for showing up late or leaving early
  • When timesheets need to be submitted
  • Disciplinary action for clocking in or out for other employees

How do you motivate employees to follow the policy?

Ensure everyone reads the policy, which should be part of the employee handbook you give employees when they start working for the company. Have them sign an acknowledgment of receiving and reading the handbook. Meet with employees individually if they consistently ignore the policy. You can also establish disciplinary action for repeated infractions. 

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