A timesheet error can potentially cost you giant fines and quite possibly your business. All it takes is one tracking policy that’s not included in your system or a bad audit or simple complaint. The most ironic thing maybe you are not aware your business is in noncompliance, and it is all so preventable
Every time an employee punches a clock, shares location data, or logs hours worked in your time tracking software you’re generating a legal document based on employee time.
Fail to manage that document with care, transparency, and compliance in mind and it could end up costing you exponentially more than any lost payroll or unbilled hours.
Think you have nothing to worry about because your timesheets add up?
These days compliance isn’t just about punch ins, it’s about designing systems that prioritize trust over surveillance.
Time tracking compliance is made up of how you track, what you track, and why you track it.
Lead with those questions wrong and you could risk fines. Risk losing employee trust. Risk your reputation. Or even risk your business being able to operate.
So next time you open a time sheet take a moment to ask yourself this:
Does your tracking system adhere to the laws of where your employees work?
Are you asking for consent or collecting evidence to sue yourself?
Are your employees aware of what you’re tracking? Protected by those policies? Treated fairly?
Let’s dig into why.
Because when it comes to time tracking compliance, the risk isn’t to the employee time you are tracking. It’s to your compliance efforts that you’re not paying enough attention to.
Time tracking compliance 101
Time tracking compliance means logging hours in a way that’s legal, ethical, and protects your employees’ rights.
Essentially, it means meeting all legal requirements for how you record, store, and manage employee time and data accurately and effectively. This includes clock ins, timesheets, timekeeping systems, and how you process that data for payroll or auditing purposes.
It’s like how you keep your business’s tax records. Inaccurate? Incomplete? Collected without proper disclosures? You’re on the line.
Employee time is no different.
Let’s review what compliance covers:
- A time tracking software solution that complies with your country’s labor laws and regional privacy legislation
- Accurate collection of employee time no matter the role or if employees are hourly vs salaried
- Retaining timekeeping records that are secure, available, and compliant for audits or government review
- Securing consent to collect when monitoring software is tracking behavioral data (i.e. geolocation or screen activity from remote teams)
- Safe data storage that doesn’t risk leaking employee data in violation of data security laws
Clear policy on what, when, and why you are tracking employee time
If any of your current timekeeping practices feel outdated or lack clarity, that’s a problem.
Yes, even if you use an archaic paper timesheet system. Or your team keeps track of hours on Excel spreadsheets. Or you think your advanced timesheet app has you covered.
One inaccurate timecard during a pay period. One missing consent form. One employee you’ve tracked in the wrong country because they worked remotely can open your business up to a costly (and stressful) legal and financial nightmare.
Especially if you have remote or distributed employees working across multiple states or countries. Speak to those nuances.
Alright, let’s dive into why time tracking compliance is important (and what happens when you don’t have it).
The importance of time tracking laws
Logging employee hours sounds simple. The laws around tracking time employee hours aren’t.
Noncompliance with privacy laws, FLSA, and labor laws not only open you up to liability. They can put your entire operation at risk.
That’s why it’s critical to understand time tracking compliance. Not just for your company’s payroll or budget, but for protecting your people, reputation, and revenue.
