Time Card Laws

Federal law and many state laws require that employers keep accurate records of the hours worked by employees in order to properly calculate overtime, and to keep a records of employees' vacation leave, sick days and other absences. Many employers choose to use time cards to track their employees' working time.

Significance

1. The federal requirement that employers keep accurate records of the time worked by employees ensures that employers maintain detailed and precise documentation of the hours worked by employees and the wages paid to them. In particular, time card laws are intended to track time of those employees who are entitled to overtime pay so that overtime wages are calculated accurately. Many states have their own laws that mirror, or are stricter, than their federal counterparts.

Types

2. Employers can maintain records of the hours worked by using handwritten time cards, scanners, electronic badge readers or by having their employees punch time clocks. Any of these methods is acceptable under federal law as long as they accurately reflect the time worked by the employees.

Considerations

3. To ensure compliance with time card laws, employers should implement a written policy informing employees of the time card policy and the penalties for non-compliance. Employees should be aware that they are responsible for accurately filling in their time cards to reflect all hours worked and any absences from the job site. While time card laws are directed primarily to nonexempt employees (those entitled to overtime pay), employers should also track time of exempt employees to maintain accurate records of sick days, holiday leave and other time off.

Effects

4. While the effect of time card laws is to accurately reflect time worked, federal law, as interpreted by the Department of Labor, does permit employers to "round off" time on time card entries. To be legal, these practices should not unduly benefit the employer and should tend to balance out over time. For example, many employers round off time worked to the nearest 1/4 or 1/6 of an hour. To make payroll easier, most employers pay employees in either 10-minute or 15-minute time increments.

Warning

5. Because time cards are official business records, falsification of time card records are violations of the law. Employers should therefore ensure that employees are aware that any deliberate misstatements on time card records, or filling in time cards for someone else, are serious offenses that may result in severe consequences, including discharge.