Employee time tracking app: what the law requires

Time records are one of the first things a wage-and-hour investigator asks for, and records kept in pieces (a paper sheet at the office, texts from the job site, a spreadsheet at the bookkeeper's) are hard to put back together. Below is what the law requires, what you can use, and when an app built around the way your business works is worth it.

What the law requires for time records

Under the Fair Labor Standards Act, employers must keep accurate records for every non-exempt employee, including:

Overtime is due at one and a half times the regular rate for hours over 40 in a workweek, which is why the daily record matters: without it, nobody can show what was owed.

Records have to be kept, too: time cards and wage-computation records for two years, and payroll records for three, under 29 CFR Part 516. Many states add their own rules, such as meal and rest break records in California, so check your state labour department as well.

Employers in Europe face the same idea from another direction. In Case C-55/18, in May 2019, the EU Court of Justice ruled that employers must have an objective, reliable and accessible system that measures each worker's daily working time.

Paper, spreadsheet or app?

Most problems aren't about the format but the timing. Hours need to be recorded on the day, not reconstructed at the end of the pay period.

What a time tracking app should do

Beyond Clock in and Clock out, a good app:

• keeps an edit history: who changed a time entry, when and why;
• separates hour types: regular, overtime, night, weekend, paid leave;
• handles time off and absences, so the period total adds up on its own;
• works on a phone, including with poor signal, for people in the field;
• exports to payroll in the format your payroll provider or accountant needs;
• has roles: employees see their hours, supervisors approve them, payroll exports them.

GPS, cameras and fingerprints

Clock-ins can be verified in several ways, and each comes with rules.

GPS. Location checks are common in field work, but tell people first. Some states write the notice into law: in New York, Civil Rights Law § 52-c requires employers who monitor phone, email or internet use to give written notice at hiring, get an acknowledgement and post the notice. Written notice is the safe default for location tracking too. In practice, check location at clock-in and clock-out, not all day.

Fingerprints and face scans. Illinois' Biometric Information Privacy Act requires a written release and a published retention and destruction policy before you collect biometrics, and lets employees sue for violations. Texas and Washington have biometric laws as well. A PIN, a badge or a phone app avoids the question entirely.

In the EU, biometric data used to identify people is a special category under GDPR, and fingerprint clocks are hard to justify when a card or an app does the job.

Off-the-shelf or custom-built?

An off-the-shelf app is the right choice for a standard setup: people clock in and out, shifts, paid time off, an export to payroll. It's running within days and charged monthly, usually per user. Before you choose, run a sample export and show it to whoever does payroll.

A custom app pays off when time tracking is tied to the rest of the business:

• hours are logged per job, project or client, so you know what each job really cost;
• billable hours need to land on the invoice;
• you have your own rules for differentials, shifts or approvals that standard apps don't cover;
• you already pay per-user fees for three tools that don't talk to each other.

It's paid once to build, plus hosting, and the data stays with you. How the two compare over a few years is in custom software vs off-the-shelf, and what internal tools cost is in how much does a web app cost.

Checklist

1. Hours are recorded on the day, with start and end times.
2. Every edit shows who made it, when and why.
3. Overtime, paid leave and absences are tracked separately.
4. Period totals export in the format payroll needs.
5. Time cards are kept two years and payroll records three, or longer if your state says so.
6. If you use GPS or biometrics, you've given the notices and collected the consents your state requires.

We build time tracking apps as web apps that work on any phone, connected to your jobs, payroll export or invoicing. After the first call you get in writing what it would include, what it costs and how long it takes. Details are on our web development page.