As an employer, you shouldn’t overlook the importance of keeping records of when your employees clock in and out for work. You might find yourself in legal trouble if you don’t monitor your employees’ hours and are deemed liable for certain violations that you could have avoided if you’d kept track of each staff member’s time on the job.
You might not even be aware of all the legal reasons for why you should have records of your employees’ work hours, and gaining a clear understanding of these reasons may prompt you to be more diligent about this task.
An employee may claim that they should have been paid more than what was given to them, and keeping track of their work hours can help prove that they paid the correct amount. Documentation of the employee’s hours will be especially important to have if the disgruntled employee tries to sue you in court or threatens to take you to court unless you offer a settlement.
In addition to the hours worked, you should also keep track of each staff member’s pay rate per hour in case someone tries to claim that you’ve shorted them on their hourly wages.
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In addition to an employee’s normal hourly wages, they may want to get overtime pay for extra hours that they claimed to have worked. By law, non-exempt employees are supposed to be paid at least one and a half times their regular hourly wages if their time working exceeds 40 hours within a given week.
However, some dishonest staff members may try to claim that they worked overtime even though they didn’t, and this can be especially difficult for you to refute if you normally don’t keep track of employees’ hours and some of these employees claimed to have worked while you were out of the office.
Whether Benefits Must Be Paid
You might be required to pay for health insurance and other benefits if employees work over a certain number of hours. Even some of your part-time employees might try to claim that they worked more than they were supposed to and should qualify for benefits.
By keeping track of each employee’s hours, you can show proof that certain employees don’t qualify for benefits. If your business records are ever audited, your highly detailed work and attendance records will allow the auditors to clearly see which employees should be paid benefits versus those who shouldn’t.
A virtual time and attendance system can make tracking your employees’ work hours easier so that you won’t have to offer benefits unnecessarily, and the time and attendance system cost shouldn’t be too high for your company.
Records of your employees’ work hours can even work in your favor if anyone tries to claim that they suffered an injury on the job. Your records can show whether the employee was in fact present at your company when the injury occurred, and these records might save you from facing lawsuits or paying worker’s compensation claims if the employee really wasn’t at work.
The employee might have also gotten injured when they weren’t supposed to be on the job and worked hours that you didn’t authorize, and your records can additionally work in your favor if they can show that the employee wasn’t supposed to be on the clock.
Many places have laws that require employers to record each employee’s work hours to ensure that staff members aren’t being overworked and are getting paid for the entire shift.
The records should include the dates that were worked and the specific times that each employee clocked in and out for their shift. You should keep these records for at least two years in case an employee tries to dispute their hours and pay or you’re audited. Even if an employee is no longer working for you and seems to have left the job on good terms, having these records may save you from certain legal consequences.
Regardless of whether you run a large or small business, it’s important to document each employee’s work hours to protect yourself from a legal standpoint. You may have fewer legal obstacles to deal with if you keep detailed records of the dates and times of each worker’s shifts.