How Accurate Timekeeping Protects Employers From Costly Wage & Hour Claims

Scheduling and timekeeping are the backbones of a business with hourly workers. Both come with challenges: keeping in compliance with labor laws, keeping accurate records, and paying employees fairly for the time they’ve worked. To avoid costly wage and hour claims, consider some of the following tools to ensure your company is always in compliance.

Potential Wage and Hour Violations 

Employees in the United States are protected by the Federal Labor Standards Act (FLSA), which dictates labor law including:

• An hourly minimum wage of $7.25 (as of July 24, 2009)
• Overtime pay of time and one-half the hourly rate for each hour worked over forty in a 7-day period (applies to certain jobs that are not exempt from the rule)
• Proper classification for exempt and non-exempt employees (e.g. not classifying an employee as an independent contractor)
• Regulations for employees who receive tips as part of their regular wages
• Rules governing employment conditions for children under 18
• Proper recordkeeping

For some states, FLSA is considered the bare minimum, and additional laws govern these criteria.

For each of these areas of labor law, the burden of compliance falls upon the employer. The costs for violation can be high. In 2025, the enforcement arm of the Department of Labor recovered over $259 million in back wages for nearly 176,957 employees. The average amount given to each employee was $1,465. That doesn’t include the potential legal fees and penalties employers must pay should the employee’s claim have merit.

Common Timekeeping Errors

Review some of the most common errors that occur in tracking employee time.

Unreadable or misplaced paper time sheets

Manual timekeeping seems like the simplest solution: your employees keep a manual time sheet. In practice, it can lead to issues with misplaced or damaged cards or recording unreadable hours. This is a particular problem in industries where the work is messy or subject to the elements.

Missed punches

Missed punches most often occur in response to human error. People forget to punch in because they have something on their mind, they’re late for work because of traffic or a life emergency, or there is an issue with the network. Because punches need an in and out pairing, there’s potential for missed punches to affect payroll.

Time theft

Time theft refers to punching in before or after the shift starts and ends. Sometimes this happens by a “buddy punch,” where another employee clocks in for someone who is late or leaves early, or by clocking back in from a meal break without going back to work.

Rounding errors

The FLSA allows for rounding to the nearest 5, 6, or 15 minutes as long as the system is neutral and doesn’t favor the employer over time. The common 7-minute rule suggests that minutes 1-7 are rounded down and minutes 8-14 are rounded up, which ensures fairness. It’s difficult for manual rounding to be consistently fair. 

Multi-location missed punches

If your employees work at different locations or have a job where they’re in the field, they may forget or be unable to clock in and out given the variable nature of their work schedule.

Missed mandatory breaks

There are no mandatory meal breaks required under the FLSA but many states have rules about break length and timing within a shift. If employees eat at their desk while doing work tasks and don’t clock out, your company may be in violation of labor laws.

Payroll errors

Manual calculations of work time – especially if there are any of the punching errors listed above – will directly affect how employees are paid, sometimes without noticing until time has passed. An audit could reveal underpayment and yield penalties.

Timekeeping Software Offers Solutions

Workforcehub offers the solution to these common problems:

• Punching in on an employee’s personal mobile device, with the option to set up reminders before the shift starts
• Geofencing records the punch at the location where the employee is expected to be, eliminating buddy punches and timekeeping ease from any location
• Reminders for mandatory breaks, with an electronic nudge to clock in and out
• Allows for special punches for extra meetings or special circumstances
• Timekeeping data integrates seamlessly with payroll systems to ensure employees are paid accurately for their recorded time

Key Benefits of Accurate Timekeeping

Explore some of the top benefits of accuracy in managing employee time.

Improved employee and employer relationships

Robust timekeeping tools can reduce employee micromanagement, which can deteriorate trust and good working relationships. Managers who are obligated to address recurring mistakes often feel frustrated, which leads to tense interactions and, at worst, attrition. 

Protection against wage claims

When timekeeping software keeps accurate data, with tools like reminders and geofencing, you’re armed to avoid mistakes that leave you open to wage claims.

Recordkeeping compliance

The data recorded in timekeeping software meets and exceeds the FLSA’s requirements for recordkeeping, and you can adjust it to keep compliant for the laws of your state.

Controls labor costs

Scheduling and timekeeping software helps you schedule higher- and lower-cost employees on the same shift, so you can budget your labor costs properly. This big picture view of your employees’ schedules can help you avoid panicked overtime for shift coverage. It has tools to remind employees not to stay past their shift end when the coverage is adequate.

Reduces scheduling and HR labor

Smart automation of the most tedious tasks like scheduling, recording hours, calculating payroll taxes, and administering checks reduces HR and scheduling labor by many hours per week. The seamless integration of each step of the process makes the job much easier.

Implement WorkforceHub to Protect Your Business

Accurate timekeeping can feel like one of the most tedious acts of your company. When you harness the power of WorkforceHub to integrate each part of the system, it’s easier to maintain compliance with federal and state labor laws. Protect yourself from claims and penalties by paying your employees what they’re owed.