Time and Attendance: Timekeeping, Policies, Software, Compliance, Templates

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With an effective time and attendance policy, you can reduce liability, save money, boost employee engagement, and ensure wage and hour compliance. The information gleaned from systems can also aid in productivity tracking, labor optimization, and workforce modifications.

It's important to assess the company culture as part of your efforts to improve attendance and establish a policy. Chat with shift leads, supervisors, and managers about their expectations and how they handle employees who slip up. If one shift lead takes a lax approach while another is extremely strict, employees are probably getting mixed messages. As a result, you may have team members who follow their supervisor’s lead, rather than adhering to a company-wide policy.

Failing to track employee time can be an expensive mistake for a business of any size, but it’s especially harmful for a small business. Employees may overestimate how much time they spent working each day, whether intentionally or by mistake. This means they’re getting paid for time they didn’t necessarily spend on work tasks. Since payroll is tied to hours worked, even a small mistake can have a costly result. If a business underpays an employee, this could be grounds for legal action. It’s just not worth the risks that come with a poor solution for time tracking.

At Swipeclock, we’re experts in time clocks for small business clients. We understand the needs of small business owners, which is why we offer cost-effective workforce management solutions for time and attendance tracking. Our goal is to provide time simplicity, whether you’re tracking a handful of employees or watching your business grow and expand. Explore our wide selection of workforce solutions. Our suite includes time tracking, scheduling, applicant tracking, PTO time management, onboarding, and more. We also have a robust partner program for referral and resale partners.

Every business has days where things just flow smoothly. Employees arrive on time, ready to work, productivity rates increase, and the morale is high. But on other days, businesses may experience challenges, such as absenteeism and low productivity. Accommodating the ebbs and flows is one of the costs of doing business. It’s much easier to manage your workforce when you have an effective and well-applied time and attendance policy. Understanding the purpose of time and attendance policies, as well as what’s included under the T&A umbrella, can help your business be more prepared for challenges as they arise.

What is Time and Attendance?

Time and attendance refers to the process of tracking the hours worked by employees and their attendance at work. You might also hear discussions of time and attendance systems, which use automated processes rather than manual ones to track time. This is also referred to as time and labor tracking or time management. An effective attendance policy is important for a business, regardless of its size or industry. The policy must include a few key components:

  • Effective creation and sharing of employee schedules
  • An attendance policy that protects the company and outlines employee expectations
  • Accessible employee time management and tracking tools

With an effective time and attendance policy, you can reduce liability, save money, boost employee engagement, and ensure wage and hour compliance. The information gleaned from systems can also aid in productivity tracking, labor optimization, and workforce modifications.

We’re diving into time and attendance, focusing on how your business can track employee time more effectively.

Employee Scheduling

A key aspect of time and attendance is an effective solution for employee scheduling. An employee’s schedule dictates when they need to be at work and helps the business determine staffing needs. Regardless of the industry or size, a business simply must invest in efficient employee scheduling.

Employee scheduling software

By creating a scheduling process or improving the existing process, you can lower turnover while boosting productivity. Time tracking is easier when you know exactly which employees should be working and when. That way, you can ensure they’re paid accurately based on the hours worked.

Scheduling is particularly vital in customer-facing industries, such as retail and healthcare. Without staff members available to serve the clients, a business simply can’t provide the necessary products or services. Having the right employees scheduled to work at specific times ensures smooth operations and a positive customer experience.

By contrast, poor scheduling can play a role in higher turnover rates and revenue losses. If employees don’t know their scheduled hours, they might show up late or leave early, leaving the business scrambling to fill in the gaps. When employees believe that the scheduling practices are unfair, morale tends to drop, which can further affect turnover.

Scheduling Must-Haves

When considering an employee scheduling system, look for several key elements:

  • Accessibility: Employees and supervisors should be able to get into the scheduling system from any device at any time, whether they’re at home or at work. Accessibility is a must when it comes to effective scheduling.
    Automatic notifications: When a manager creates or updates a schedule, it’s most important that the affected employee(s) know about it. Scheduling software should provide an automatic notification in real time to any employee affected. This is particularly vital for off-site or remote employees who can’t look at a printed schedule or ask about scheduling changes during a shift.
  • Time off tracking: When an employee requests time off, approved requests should flow into the scheduling system. If that doesn’t happen, a supervisor may end up scheduling them to work during a time when they’ll be unavailable.

Depending on your industry, consider some of the following tools:

  • GPS or location details: If you have multiple locations or employees who travel to different sites, location details are useful in the scheduling tool. When an employee checks their schedule, they need to know where they’ll be working during a particular shift. Failing to provide this can cause workers to show up at the wrong location, which wastes time and money.
  • Job or location tracking: When an organization assigns an employee’s hours to a job or location code, it’s helpful to have that ability in the scheduling system. As a supervisor creates the schedule, they can instantly see which location or job to assign the hours, rather than going back and doing it after the shift. Automatic tracking also reduces the risk of errors, which may result in budgetary issues and incorrect job costing.
  • Shift swapping: It’s inevitable that employees will need or want to swap shifts. They might have an urgent situation come up, or have forgotten to ask for a day off and end up on the schedule. No matter the reason, it shouldn’t fall on the supervisor to handle shift swaps. When the functionality is built into the scheduler, it’s much easier for employees to handle swaps on their own.

When you run a small business, scheduling may not seem like a major task. But as your workforce grows, you’ll soon find that a good scheduling system is essential. Specifically, it will help with issues like employee overtime, under- and over-staffing, and schedule enforcement.

Creating an Attendance Policy

Another vital element of time and attendance is the attendance policy. This written document outlines how a business will handle attendance-related issues. This includes leave requests, tardiness, leaving early, and no-shows. A good attendance policy outlines guidelines as clearly as possible and enforces them fairly across the workforce.

Some companies use a points system in their policy. In this model, an employee accrues points for every attendance-related occurrence. Penalties apply based on the number of points accrued. Certain actions impose a higher number of points, while minor infractions may only cost one or two points.

The purpose of an attendance policy is to outline the importance of employees arriving on time and completing their shifts. Regular attendance and on-time arrival and departure contribute to success. Additionally, arriving late, leaving early, or failing to show up at all can burden other employees and cause disruptions. According to the CDC Foundation, productivity losses caused by employee absenteeism cost U.S. employers close to $226 billion in 2015. This amount translates to $1,685 per employee.

If an employee can’t show up on time or complete their scheduled shifts, they need to face consequences. An attendance policy outlines those consequences, regardless of the employee’s position or standing with the company.

employee time and attendance

How to Create an Employee Attendance Policy

When considering what type of attendance policy to use, follow these steps to ensure that your policy is effective and fair for all employees.

Step 1: Assess the Culture

Your work culture plays a major role in the way employees view attendance and the importance of showing up on time and ready to work. Over time, a more relaxed culture may contribute to increased absenteeism, especially if a company doesn’t have a formal policy. After all, why should an employee worry about arriving late or forgetting to call in if they won’t face any repercussions?

It’s important to assess the company culture as part of your efforts to improve attendance and establish a policy. Chat with shift leads, supervisors, and managers about their expectations and how they handle employees who slip up. If one shift lead takes a lax approach while another is extremely strict, employees are probably getting mixed messages. As a result, you may have team members who follow their supervisor’s lead, rather than adhering to a company-wide policy.

As you look at your organizational culture and what message you want to send, you can establish something that aligns with the vibe. A laid-back atmosphere might allow for flexible scheduling, as long as employees complete a certain number of hours. If you have specific times in which customers are present, it’s likely that your policy will have to be a bit stricter to ensure proper staffing during those hours.

Step 2: Consider External Factors

When looking at your company culture, consider other factors that may be affecting an employee’s ability to arrive on time or provide ample notice when they can’t make it. For example, an intern might be coming from school and fighting traffic, resulting in habitual tardiness. A single mother of young children could miss work due to childcare issues or illnesses that are simply beyond her control.

By taking these factors into account, you may be able to set more realistic expectations. The summer intern might get a scheduling adjustment that allows them to come in 15 minutes after the start of the shift. A parent might have the option to work remotely when their children aren’t able to go to daycare. By considering what employees are dealing with, you can address issues individually rather than applying a policy that could end up putting them out of their jobs.

Step 3: Compare Industry Rates

It’s also helpful to assess the averages in your industry. The U.S. Bureau of Labor Statistics reports that full-time workers had an average absence rate of 3.2 days in 2021. This includes workers in a range of industries, but certain industries had higher-than-average absence rates.

Those working in life, physical, and social science occupations missed an average of 3.8 days during the year. Several industries shared an average of 4.2 days:

  •   Transportation and material moving
  •   Food preparation and service
  •   Building and grounds cleaning and maintenance

Employees with the lowest absence rates work in management, computer and mathematical, and financial operations occupations.

When you consider the physical challenges of the industries with higher absence rates, it makes sense that ill or ailing employees would need to take time off to recover. If you run a food service business, you don’t want sick employees coming to work to avoid facing the consequences of an overly strict attendance policy. Ill food handlers can contribute to sickness outbreaks that affect customers and their co-workers. It’s important to make accommodations to protect employees and allow them time to get better when they’re sick.

Step 4: Establish Occurrences

An attendance policy might seem straightforward in discussions with supervisors and managers. However, when you deal with actual employees, it becomes a lot less clear. Does an absence refer to simply not showing up with no notice, or is that called a no-show? Does a no-show absence carry the same weight as an absence due to illness or urgent situation? Tardiness can get sticky as well, particularly if one employee arrives five minutes late and gets the same punishment as one who shows up two hours late.

Examples of occurrences include:

  • Absence (supervisor notified a certain number of days or weeks in advance)
  • Unscheduled absence (supervisor notified a certain number of hours in advance due to emergency or another unexpected cause)
  • Illness (supervisor notified prior to start of shift)
  • No-show (employee does not notify supervisor)
  • Late arrival/tardy (employee arrives a certain number of minutes after scheduled start time)

Certain absences should be exempt from your policy to avoid legal blowback. For example, an employee serving in the military may need to miss work due to training or an active-duty assignment. An employee who qualifies for the Family and Medical Leave Act (FMLA) may have unexpected absences due to flare-ups of a medical condition or the need to care for someone else. Jury duty is a civic responsibility that an employee can’t control. Penalizing them for jury duty could put your business at risk.

Step 5: Outline Disciplinary Actions

In addition to outlining what an occurrence is, your policy should include details about the disciplinary actions. All disciplinary actions should be enforced equally across your workforce. Your personal opinions about attendance also shouldn’t shape the policy, as you may end up losing good employees if you terminate for the first infraction.

Instead of allowing your feelings or expectations to dictate employee behavior, consider the business effects of absenteeism. Tie the disciplinary action to the impact on your business. If arriving 10 minutes late has the same impact as arriving 45 minutes late, set the same penalty.

Common disciplinary actions include:

  • Verbal warning
  • Written warning
  • Developmental coaching session

If an employee continues to violate despite facing disciplinary actions, you may need to terminate them. The employee attendance policy should clearly outline when termination can occur to reduce the risk of legal blowback.

Step 6: Keep the Policy Simple

Keeping your attendance policy simple ensures that all employees understand it and can follow it. By contrast, a complex policy can quickly become overwhelming, making it much harder to remember. When creating your attendance policy, use clear, plain language and define expectations. You can always adjust the policy if you find that something in it doesn’t work for the staff or causes confusion. The best way to manage an employee attendance policy is with a Human Resources Management System (HRMS). You can modify a digital document as often as necessary and everyone can access the latest version. It’s also cheaper than printing a physical document.

Step 7: Share the Policy with Employees

After you create an attendance policy, make sure employees read and understand it. Communicate expectations clearly and regularly to the workforce. Ensure that all members know where to find the written policy so they can review it as often as they want. Include it in your employee handbook or include a link in your HR portal. Employees should also understand that the policy will be enforced consistently, regardless of ranking or seniority. Every employee should be held to the same standard to ensure legality and fairness.

As you discuss an employee attendance policy, emphasize its purpose. It should help your company operate more efficiently every day. Absenteeism makes it more difficult to achieve that goal. Employees who are at work have to take on a larger workload or deal with unhappy customers and other trickle-down effects.

Ask for feedback from employees when rolling out the policy. If you find that multiple team members have similar responses, pay attention, and consider what changes could be made. Look for aways to compromise without sacrificing business needs. By asking for and incorporating feedback, you increase the odds that employees will comply. When an employee feels heard and valued, they’re more likely to remain loyal to a company and follow its policies.

 

employee time and attendance

Attendance Policy Template

As you consider how to create an effective attendance policy, use this template as a starting point.

Objective

The purpose of this attendance policy is to establish [business name]’s procedures for handling employee tardiness and absences to ensure that the company can operate efficiently and maintain consistency across all departments.

Regular, punctual attendance is a vital aspect of employment with [business name], regardless of position or seniority. An employee is expected to report to work based on their schedule, on time and ready to begin working immediately. All employees are also expected to remain at work for the entirety of their scheduled shift. Arriving late and leaving early cause disruption to the workforce. Unscheduled absences that become excessive are also highly disruptive and should be avoided whenever possible.

All absences outlined in this policy are subject to disciplinary actions, with the exception of those covered under the Family and Medical Leave Act (FMLA) and reasonable accommodations covered under the Americans with Disabilities Act (ADA). Absences related to military or civic duties (jury duty) are also exempt from the policy.

Attendance Occurrences

At [business name], we establish the following occurrences for employees: 

  • Absence (unexcused): Failure to report for work during a scheduled shift without at least 48 hours’ notice provided to the supervisor. If an employee must be absent from or late for work due to an illness or emergency, they must provide notice to the supervisor prior to the start of their scheduled shift.
  • Tardiness: Failure to report for work at the scheduled time or return from a break at the scheduled time.
  • Early departure: Failure to remain at work for the duration of an employee’s scheduled shift.
  • No-call no-show: Failure to report to work, no notice given to the supervisor.

An excused absence is defined as the failure to report for work during a scheduled shift, but with at least 48 hours’ notice provided to the supervisor and approved in advance. An employee must have sufficient paid time off (PTO) accrued for an excused absence. Excused absences do not count as occurrences under [business name]’s employee attendance policy.

If an employee is ill or injured and can’t return to work for three consecutive days or more, the supervisor will require proof of care from a physician or health care provider and a release indicating fitness for duty prior to their return.

Disciplinary Actions

An unexcused absence counts as one point on the employee’s attendance record. Both tardiness and early departures count as one-half point each. A no-call no-show counts as three points on the employee’s attendance record.

If an employee accrues six points in a 30-day period, disciplinary action will be taken. At [business name], the disciplinary action will go as follows:

  • First offense: Verbal warning from supervisor
  • Second offense: Written warning from supervisor
  • Third offense: Completion of two-hour training session on excessive absenteeism and its effects on the organization
  • Fourth offense: Grounds for termination

Job Abandonment

Should an employee fail to report for work for three consecutive days with no notification provided to the supervisor, this is considered job abandonment. As a result, this employee has committed voluntary termination of the employment relationship.

Attendance Write-Up Sample Template

When providing a written warning to an employee, it’s important to include detailed information and maintain consistency. Create a template for a written warning. You can review the sample below when creating your own template.

Dear Jason Jones,

This letter serves as a written warning and reprimand for failing to meet the attendance standards at Robertson Manufacturing. We wish to emphasize the seriousness of your absenteeism and warn you of additional disciplinary action if your attendance doesn’t improve. Your frequent absences have resulted in an inability to rely on you, and your department and co-workers are suffering the consequences.

Your attendance is an essential aspect of your employment with Robertson Manufacturing. Between June 1 and August 31, 2022, you have arrived after the scheduled shift start time four times and missed three full workdays. None of these occurrences had prior authorization from your supervisor, Jennifer Lee.

These circumstances warrant a written warning, as Jennifer Lee has already given two verbal warnings on July 1, 2022, and August 10, 2022. Per the Robertson Manufacturing attendance policy, which you signed as a condition of employment on May 1, 2022, you will not receive an additional written warning. Should you fail to improve your attendance, the next step will be termination.

Your frequent absences have placed undue hardship on your department, supervisor, and the business as a whole. Your co-workers must assume your duties during your absences, and your supervisor is unable to staff the department effectively.  

 As a reminder, your work schedule is 8:30 a.m. through 5:30 p.m. on Monday through Friday. Your scheduled meal period is from 12:00 through 1:00 p.m. each day. Any deviation from your assigned schedule requires approval in advance from your supervisor, Jennifer Lee.

You are now in a temporary assessment period, during which you will undergo three one-hour coaching sessions with your supervisor, Jennifer Lee, or a member of the Human Resources department. If you arrive late, leave early, or incur any absences between today, September 15, 2022, and December 15, 2022, you will face termination.

Robertson Manufacturing expects our employees to observe an agreed-upon standard of conduct, and this includes adhering to the attendance policy. As a reminder, you reviewed and signed it as a condition of your employment. You may respond to this notice in person or in writing. We are also receptive to any reasonable suggestions as to how we can assist during your improvement period.

Please sign and return this letter to the HR department to indicate that you have received and reviewed it. If you have any questions or concerns, you may follow up in writing or in person.

 Sincerely,

Randall Rogers
Human Resources manager, Robertson Manufacturing

old fashioned punch card employee time clock

Vintage time clock with racks for timecards, circa 1960s

Time Management and Tracking

Another key element of time and attendance is managing and tracking employee time. The hours worked by an employee determine how much they get paid. Moreover, the level of accuracy determines whether the payroll process is correct. When managers and supervisors get busy with their own tasks, it’s challenging to keep tabs on their employees. This includes tracking their arrival and departure times, as well as when they took their breaks.

Why Use a Time Tracking System?

Time tracking creates accountability and can boost employee productivity. When an employee knows their time is being tracked, they may be more likely to manage their time effectively. Team members who assign their work hours to various projects can also provide valuable data. Management can use this data to identify which tasks may be taking up too much time.

Failing to track employee time can be an expensive mistake for a business of any size, but it’s especially harmful for a small business. Employees may overestimate how much time they spent working each day, whether intentionally or by mistake. This means they’re getting paid for time they didn’t necessarily spend on work tasks. Since payroll is tied to hours worked, even a small mistake can have a costly result. If a business underpays an employee, this could be grounds for legal action. It’s just not worth the risks that come with a poor solution for time tracking.

Looking for the perfect time and labor system? Download our free Time and Labor System Buyer’s Guide.

Time Tracking System Features

If you use manual tracking, now is the time to move on to something less time-consuming and inaccurate. A paper timesheet or time tracking spreadsheet simply doesn’t cut it in today’s work environment. Modern time tracking systems automate manual tasks, save time and money, and protect the business. Explore some of the following features when comparing employee time tracking systems.

Time Tracking

Of course, an employee time tracking system should, well, track time. But this feature goes beyond simply clocking in and out. A robust system allows supervisors to review and filter time data based on various factors, as well as view schedules and other details at a glance. The time data should also be easy to export and use in payroll processing, as accurate payroll depends on accessible employee time data.

As you compare systems, make sure to determine what format(s) you need your data in and ensure that the time tracking solution you’re considering aligns with those needs. You may be able to set up automatic generation of timesheets, ensuring that those responsible for processing payroll receive the data they need prior to payday.

Analytics and Reporting

A good time tracking system should offer insights into the data it stores. A small business can use the information provided to assess the hours worked by a particular department or across the entire workforce, measure performance, and even identify potential opportunities for growth. If a particular employee seems to struggle with absenteeism or other attendance-related issues, the supervisor should be able to quickly pull up their timesheet and assess their progress.

For more information on HR analytics, download our infographic: 6 Ways to Accelerate Small Business Growth With HR Metrics.

Integrations

The ability to integrate the timekeeping system you choose can help you reduce manual efforts, saving time while improving accuracy. Time tracking systems can integrate with a variety of software platforms, including:

  •   Slack (instant messaging)
  •   Salesforce (customer relationship management)
  •   Asana (project management)
  •   PayPal (payment processing)

As you assess which system will fit your goals and budget, consider what other programs your employees use regularly. Look at integration capabilities so you can simplify your work. You don’t want to add more work or make things more complicated.

Access from Anywhere

Depending on your workforce, you may want to use a solution that’s accessible from anywhere. Some industries have workers who perform tasks in a variety of locations, so a single, centralized time clock may not work. Examples include construction, home health care, and transportation. In today’s world, more employees are working remotely than ever before. You might have remote employees or contractors who can’t clock at a single terminal.

If any of these scenarios apply, look for a system that has a mobile app. Employees should be able to use the app to clock in and out, manage their time, and review their schedules. If you’re concerned about employees clocking in when they’re not at work, look for geofencing or other location-based restrictions. A geofence ensures that an employee can only clock in or out when they’re within a set location. Some alerts the manager if they punch outside the fence.

For an in-depth guide to remote employee management, get our free eBook: 9 Steps to Mastering Remote Workforce Management.

Modern Timekeeping Solutions

The days of a basic time clock are behind us, and both employers and employees are looking for timekeeping solutions with more robust features. As you look into different platforms, assess the mechanics of tracking employee time.  A time and attendance clock can make or break your efforts to track time more efficiently. Your needs may differ from a company of a different size or in a different industry. Look for clocks that align with your business’s time tracking efforts.

By taking the time to compare the various time tracking systems and what they offer, you can determine which solution offers the best features while fitting into your budget.

Employee swipe card time clock

Types of Time Clocks

If you’re wondering, what’s the best time clock for a small business, exploring the different types of punch clocks available can be helpful as you make your decision. Ultimately, the best clock for your small business depends on the industry and needs of your employees. It’s helpful to make sure that the clock you choose can reduce the risk of time theft, particularly through buddy punches made by employees. Review the main types of time clocks to decide which might be the best fit.

Biometric Time Clocks

Biometric time and attendance clocks produce a time punch for each employee based on a physical, distinguishing feature. Also referred to as a fingerprint time clock, this type of timekeeping device only allows approved individuals to create time punches. The most common physical feature used by these electronic time clocks is the fingerprint, although newer models may allow employees to scan their palms or irises.

Using a biometric time clock machine can prevent buddy punching, as an employee cannot pretend to be someone else when clocking in for work. Only those who are physically present will be able to punch in or out, using their physical characteristic that has been set up within the system and linked to their employee record.

Web-Based Time Clocks

Web-based time clocks are more basic than a time card machine, making them appealing to companies with employees who may not want to learn complex devices. A web-based time clock allows for online timekeeping in an efficient and user-friendly manner. This type of time-tracking system is also called a virtual time clock or an online time & attendance tracking system. It allows an employee to clock in or out from a web browser on a computer. If you choose an employee time clock online for tracking purposes, you may allow employees to clock in from their own computers or set up a terminal that all team members can use upon arrival.

A web time clock may require users to log in with a password or simply enter their employee number or another distinguishing characteristic. If you’re considering this option as a clock for work, make sure to look for a system that also includes other features, such as meal and break management, real-time visibility, and PTO integration. One of the key advantages of a web-based timekeeping system is its simplicity.

If your business is on a tight budget, a web-based tracking solution may be better. It’s often a low-cost or free time clock that employees can use to clock in and out quickly from their own computers or a shared terminal.

GPS/Geofencing Time Clocks

Geofencing time tracking involves creating virtual “fences” and only allowing employees to punch in or out when they are physically located inside those areas. If you have employees who work at different locations regularly, a geofence time clock may be the best option to ensure they can track their time effectively. This type of tracking solution is also known as a GPS time clock as it uses GPS data to determine where an employee is located.

When creating fences, you may be able to use geofence time tracking tools to assign specific locations to individual employees. This ensures that only approved members of the workforce can track their time from different locations. Using geofencing time tracking typically requires the use of a mobile time clock.

Facial Recognition Time Clocks

A facial recognition time punch clock is one of the more advanced options available in today’s market. It differs from other biometric clocks in that it uses technology to assess an individual’s face rather than their fingerprint, palm, or iris. Some employees are uncomfortable touching a shared time clock. A facial recognition clock can be more appealing as it doesn’t require physical touch. Your team members can simply stand in front of the clock, facing its scanner. The clock will quickly identify the employee through measurements between facial features.

Upon authentication of the employee, a facial recognition time clock will record the time. This timestamp moves to the employee’s digital timecard, which ensures accurate timekeeping for payroll processing and PTO accruals. Modern facial recognition clocks work fast, eliminating a line of employees or bottlenecks during shift changes. They’re also accurate, offering close to 100% accuracy in facial recognition. Buddy punching will become a problem of the past, as employees can’t clock in for others anymore. If you need to control access to certain areas, a facial recognition clock can prevent unauthorized individuals from entering.

You’ll notice that none of these options include a paper sheet or tracking time in Excel. These methods are outdated, inaccurate, and time-consuming. It’s best to say goodbye to them for good. A work time clock should meet the needs of today’s employees while eliminating manual processes for HR professionals.

Absence Management

Absence management refers to the policies, programs, and procedures that an employer uses to reduce absenteeism. Examples of absence management policies include paid time off (PTO), sick leave, and FMLA. Absence management is part of the overall attendance policy designed to maximize productivity and reduce disruptions caused by employee absence.

Employees will miss work from time to time, whether planned or unplanned. People get sick, get involved in car accidents, and experience emergencies that prevent them from showing up for their shifts. They also choose to take time off to attend to their personal needs and the needs of their loved ones. A formal system helps your business run more smoothly. You can plan ahead for expected absences and make accommodations for unexpected absences. Tracking unplanned absences, tardiness, and leaving early can also help you hold employees accountable.

Paid Time Off (PTO)

Paid time off, or PTO, is a benefit offered by many companies to its employees. Some organizations only offer PTO to full-time employees. Others provide it to everyone, regardless of the number of hours worked. A PTO program may lump all paid time off into one bucket. This way, an employee can use the time for sick leave, vacation leave, and other personal needs.

Some PTO programs allow employees to accrue time at a specified rate, while others provide a set number of hours over a one-year period. In the recent past, companies have garnered attention for offering unlimited PTO, allowing employees to take as much paid time off as they want. However, each of these has its own pros and cons, and the employees who receive each benefit can attest to that.

Importance of PTO

Offering PTO is an essential aspect of a healthy work-life balance among employees. If workers can’t take paid time off, they might not feel financially able to separate from their work duties. This can lead to increased burnout and workplace stress, which affects employee morale and the company culture. But beyond simply offering PTO, an organization must be able to track its chosen model effectively.

employee PTO

Photo by Wendy Hero on Pexels

Tracking PTO

By adopting a system to track time off, you can make better decisions around employee scheduling. This includes approving or denying requests, as well as reduce conflicts between employees. If one employee feels that another is taking more time off, it’s harder to disprove this theory if you don’t have a tracking system. On the other hand, an effective tracking tool allows a supervisor to see how many hours of PTO each employee has accrued and used, along with how many hours they have left.

A PTO tracker system can also benefit employees. If they know how many hours they can take off during the year, they can plan their schedules accordingly. An employee who gets 10 paid days off per year is less likely to schedule a three-week vacation and expect to be paid for the full time. Setting expectations around time off ensures consistency and transparency across an entire organization. Tracking PTO for remote workers can get challenging, but the right solution allows employees to check their balances and request time off from anywhere.

An effective PTO tracking system should work with the scheduling and time tracking tools of a unified time management solution. You need to be able to customize the accrual method, whether employees get a set number of days per year or accrue time off each pay period. Even an unlimited PTO policy should have a tracking mechanism for audits and consistency. Before choosing a time and attendance solution, make sure its PTO tracking tools align with your company’s needs.

PTO Policy Template

You can use this PTO policy template when crafting your own policy for your business.

Objective

[Business name] recognizes that employees will need and want to take time away from work for a variety of purposes. In order to accommodate the needs and desires of employees, we offer a paid time off (PTO) program. We strive to provide flexible paid time off from work that can be used for personal and vacation time, volunteerism, recovery from illness or injury, providing care to others, school-related needs, and other activities of each employee’s choice.

Guidelines for Use

All employees will accrue PTO hours based on the number of years they’ve worked for [Business name], although the accrual schedule depends on employment status. PTO must be used in four-hour increments and requested in advance. PTO usage is subject to the approval of an employee’s direct supervisor. Employees who are on paid or unpaid leave, workers’ compensation leave, or short- or long-term disability leave will not accrue PTO.

Employees do not have to use PTO to cover company paid holidays, military service leave, required jury duty, or bereavement time. These situations are covered under separate time off policies.

An employee must request PTO at least two days prior to the planned leave, unless an unexpected illness or emergency arises that requires the use of PTO. If employees take time off that exceeds the number of PTO hours accrued, they may be subject to disciplinary action, which could include termination. On the first two instances of excessive leave, an employee will undergo supervisory coaching. The third incident will result in a verbal warning, while the fourth will result in a written warning. If an employee has a fifth instance of taking excessive time off within a calendar year, they may be terminated.

Employees who qualify for the Family Medical Leave Act (FMLA) can take unpaid time off in excess of their PTO hours without facing disciplinary action or termination. However, all PTO time accrued will be applied before the unpaid leave period begins.

Accrual Schedule

All full-time employees, or those working an average of 32 hours per week or more, will accrue four hours of PTO per pay period, or eight hours per month.

All part-time employees, or those working an average of 31 hours per week or less, will accrue two hours of PTO per pay period, or four hours per month.

An employee may carry up to 80 hours of accrued PTO over to the following calendar year. Any PTO hours accrued in excess of 80 will be lost. [Business name] recommends scheduling PTO throughout the year to avoid losing accrued time, as not all employees will be able to take time off at the end of the year. PTO usage is subject to supervisor approval.

If an employee is unable to take PTO due to extenuating business circumstances, the HR department may grant approval to carry over hours in excess of 80 to the next calendar year. However, approval for a higher carryover rate is provided on a case-by-case basis. Employees who carry over more than 80 hours must use the excess PTO hours in the first half of that calendar year.

Termination

Upon termination of employment, an employee will be paid for the number of PTO hours accrued on their final paycheck. If an employee provides two weeks’ notice, they may not use their PTO during their final two weeks with [Business name].

Sick Leave

While some companies lump all paid time off into one single bucket, others designate some of the time for specific purposes. An example of this type of PTO policy has a separate bucket for sick leave. If a company offers sick leave to its workforce, the time can only be used when an employee is too ill to complete their duties or come to work, needs to care for an ailing family member, or must attend a scheduled appointment that relates to their health. It differs from personal time off, which an employee can use to take a vacation, attend to personal needs, or take time off from work for any other reason.

sick leave

Paid Sick Leave Laws

The U.S. Bureau of Labor Statistics reports that nearly half of American workers in private industries had access to a PTO program that included time off for multiple purposes, including sick leave in March 2021. During the pandemic, the Families First Coronavirus Response Act (FFCRA) provided employees with 80 hours of emergency paid sick leave, plus up to 12 weeks of emergency family and medical leave to care for children or other family members due to school, day care, and care facility closures.

During this time, some employers that weren’t mandated to offer emergency paid sick leave elected to expand their sick leave offering to accommodate for quarantine and recovery periods for employees affected by the virus. Tax credits were offered to employers with fewer than 500 employees, which helped to offset the costs of extended employee leave.

Federal Leave Laws

The United States Federal Government doesn’t currently have a law that requires all employers to offer paid sick leave. However, the Family and Medical Leave Act (FMLA) does afford employees up to 12 weeks of unpaid leave in specific situations. Only employees who have worked for an employer for at least 12 months are eligible. Additionally, an employee must work in a location with at least 50 employees within a 75-mile radius to qualify for FMLA.

As of January 1, 2017, all federal contractors and subcontractors must provide paid sick leave under Executive Order 13706. But this EO doesn’t apply to employers in the private sector. On the state level, an employer may be required to provide paid sick leave. At the present time, laws exist in 11 states and Washington, D.C.. These laws require employers provide paid sick leave as an employee benefit. Another 30 localities have enacted paid sick leave regulations, but the laws are confusing and reporting requirements vary. Additional legal challenges have made it more difficult for legislators to enforce paid sick leave laws.

Arizona Leave Law

The Arizona sick time law falls under the Fair Wages and Healthy Families Act, which went into effect on July 1, 2017. Employers with more than 15 employees must allow all employees, including full-time, part-time, and seasonal, to accrue one hour of sick leave per every 30 hours they work. If an employer has 15 or fewer employees, they must provide 24 hours of paid sick leave to each employee per year. Employees can use the leave to seek treatment for physical or mental illnesses, health conditions, and injuries, as well as to care for ailing family members.

Massachusetts Leave Law

Legislators in Massachusetts passed the Earned Sick Time for Employees law on July 15, 2014. The Massachusetts sick time law grants 40 hours of paid sick time per year to employees of all statuses, including FT, PT, seasonal, temporary, and per diem.

California Leave Law

Another state with a law in effect is California. Sick time is required to be given to nearly all employees, regardless of employer size. The California sick time law doesn’t apply to employees who provide in-home supportive services, work for specific air carriers, or receive coverage under collective bargaining agreements. An employer must allow an employee to carry their sick time over from year to year, although they can cap it at 48 hours. Employees earn one hour of paid leave for every 30 hours they work in the state of California.

Several localities in California have enacted their own paid sick leave regulations. These include:

Benefits of Offering Sick Leave

Offering paid sick leave to employees can benefit an organization and the members of its workforce. Employers who accommodate ill employees can reduce the risk of illness spreading throughout the workplace. Workplace illnesses can put others at risk, particularly those who are more susceptible to the negative effects of mild sicknesses. Paid sick leave also encourages employees to take time to rest and recover, rather than return to work before they feel better. When an employee doesn’t have access to paid time off when they’re sick, their financial situation may preclude them from taking unpaid time off.

The decision to create a sick leave policy ultimately depends on the needs of the workforce and what other paid time off benefits are available to employees. Providing separate sick leave can encourage employees to take time off work when they’re ill, reducing the risk of other team members getting sick. But on the other hand, employees who rarely fall ill may feel frustrated that they can’t use some of their allotted paid time off for other purposes.

As an employer, you might consider surveying your staff members to get an idea of what they would prefer. When employees feel that their input matters, they’re more likely to remain loyal to the company. A strong benefits package that incorporates what employees want, including generous paid time off benefits, can serve as a valuable employee retention and recruiting tool as well.

Sick Leave Policy Template

If you decide to create a separate sick leave policy, whether by choice or due to local laws, this template can be a starting point.

Objective

[Business name] understands the need for employees to take time off work to recover from illnesses and injuries, attend to their medical needs, and care for others.

Acceptable Use

An employee may use their paid sick leave for their own personal illness, dental or medical appointments, and other care and recovery-related needs. Sick leave is also permitted to care for a member of the employee’s immediate family (including their parent, spouse, and/or child).

If an employee qualifies for leave under the Family and Medical Leave Act (FMLA), they must use their full balance of paid sick leave at the start of the FMLA leave. Additionally, any accrued PTO or vacation leave must also be used after the employee uses all remaining sick leave.

An employee who misses three or more consecutive workdays must submit a letter from their treating health care provider for the absence. In some cases, an employee may be required to submit a fitness for duty or return to work release, depending on the extent of the illness or injury.

Sick leave can only be used after an employee has accrued it. The accrual schedule is outlined below. Upon termination of employment, an employee will not be paid for any outstanding sick leave.

Accrual Schedule

Full-time employees accrue four hours of sick leave per pay period, or eight hours of sick leave per month. This totals 12 sick leave days per year.

Part-time employees accrue two hours of sick leave per pay period, or four hours of sick leave per month. for a total of six sick leave days per year.

Sick leave may transfer from year to year, depending on how much an employee has accrued. The maximum amount of sick leave an employee may have at any given time is 200 hours, or 25 days.

Family Medical Leave Act (FMLA)

As mentioned, the Family Medical Leave Act (FMLA) is a federal law that allows eligible employees to take unpaid time off without the risk of losing their jobs. It covers up to 12 weeks of unpaid time off for the following reasons:

  • The birth of a child, or to care for a newborn child within a year of birth
  • The existence of a severe health condition that affects an employee’s ability to perform their job duties
  • The need to care for a family member (child, spouse, or parent) with a serious health condition
  • The placement of a child for foster care or adoption, or to care for a newly placed child within a year of the child being placed

Additionally, eligible employees can take up to 26 weeks of leave within a 12-month period to provide military caregiver leave. If a covered member of the U.S. Armed Forces becomes seriously ill or injured, and that servicemember is the spouse, parent, or child of an eligible employee, the employee can legally take unpaid time off work to provide the necessary care.

Applicable employers must adhere to FMLA requirements for all eligible employees. If an employee has not yet worked for an organization for 12 months or hasn’t worked 1,250 hours or more during a 12-month period, they may not qualify for FMLA leave. Employers with fewer than 50 employees also aren’t required to comply.

FMLA and PTO Overlap

The FMLA only secures unpaid leave benefits for qualified employees. The law does allow an employee to use any accrued PTO, including vacation time, sick time, or other personal time off, during their leave. An employer may not terminate the employee during their leave. The law grants the employee access to the same position they had when they left or a similar position upon their return.

Some employers offer paid time off for individuals who qualify under the FMLA. This may be referred to as paid family leave or paid parental leave. Some states currently have laws that require certain employers to offer paid family leave to eligible employees. These include California, Connecticut, Colorado, Massachusetts, Delaware, New Jersey, Rhode Island, Maryland, New York, and Washington, as well as Washington, D.C. In Georgia, South Carolina, and New Hampshire, state employees have access to paid family leave.

Common Timekeeping Problems

Depending on the type of timekeeping system your organization uses, you may encounter problems. Outdated and ineffective methods tend to come with more problems, but we’ve compiled a few of the most common timekeeping problems.

Buddy Punching

Buddy punching refers to the practice of one employee punching in for another employee who may not have arrived at work at the time. By having someone else clock in for them, an employee can show up late while still earning the same amount of pay. Buddy punching may also help someone who is constantly tardy to fly under the radar. Many supervisors review time records rather than checking when their team members arrive each day.

Timecard Fraud

Committing timecard fraud involves stealing company time and getting paid for hours an employee did not work. Companies that still use manual time tracking methods, such as paper timesheets or digital spreadsheets, tend to have higher levels of timecard fraud. Robert Half, a management consulting company based out of New York, conducted a study in the mid-1980s and found that the average office worker steals 4.5 hours per week from their employer. When the company first began its research into time theft more than a decade before, the average came in at 3.5 hours per week.

Since then, additional studies have been performed by members of the American Payroll Association and other industry leaders. An article on Software Advice indicated that nearly half of workers admit to exaggerating the number of hours worked during a shift. It’s evident that workers are still committing timecard fraud and taking payment for hours they didn’t work.

Although employees can still be dishonest when using a time lock, it’s not as easy to do. Buddy punching is one option, but an employee has to get another employee to agree to clock in on their behalf. If you use a biometric clock that requires a fingerprint scan or uses facial recognition technology, it’s even harder for an employee to commit time clock fraud.

vintage employee time clock

Vintage employee time clock in Berlin, Germany.

Calculation Mistakes

Making calculation mistakes is a common issue that can have expensive consequences. When an employee fills out a paper timesheet, they’re often expected to add up the hours for the week or pay period. But if they write the wrong total, whether intentionally or by mistake, they might get paid for time they didn’t actually work. An automated time tracker is a better option that can eliminate calculation mistakes for good. Using a time and attendance system with automated time tracking ensures that calculations are performed by machines instead of humans, so the margin for error is lower.

Excessive Overtime

When employees work a lot of overtime, this can wreak havoc on a company’s budget. Planned, approved overtime may be necessary from time to time, but some employees stick around past their end times to get some extra hours.

With a functional time and attendance tracking system, supervisors can monitor when employees are getting closer to overtime hours and make scheduling adjustments accordingly. The result? Employees who don’t feel burned out or overworked, plus a company that can adhere to its planned payroll budget.

Extended Breaks

All employees need to take breaks during their shifts. The number and duration of breaks depend on the shift length and state in which an employee works. But some employees are known to extend their breaks, which is a form of hours theft. If you have team members who are taking more than their allotted break times, your company may be experiencing negative effects. Not only does this impact the employee’s productivity, it can also wreak havoc on employee morale. When employees feel like things aren’t fair or that they have extra work due to another person’s lack of honesty, they tend to seek employment elsewhere.

employee breaks and meals

Photo by Gustavo Fring on Pexels

Your organization can resolve issues with a time and attendance tracking system with meals and breaks tools. Some automatically remind employees to take their breaks. They may have pop up alerts when it’s time to return to work. If you’re still having issues, consider having employees track their break times or check in with their supervisor upon returning from a break. Longer meal breaks are easier to track and limit, as most states allow employers to mandate clocking out for these breaks. Time tracking rules ensure that supervisors can check which employees are coming back from lunch late and which are adhering to the schedule.

Damaged, Lost, or Illegible Timecards

When employees write their own timecards, it may be hard for payroll processors to read the scribbles. Filling out a timecard quickly can result in illegible handwriting, which can create extra work for the payroll manager. Employees might also lose or damage their timecards, which can also cause delays. By ditching paper cards, you can reduce these risks and ensure that the data is always accessible and easy to read.

Time & Attendance FAQ

Many employers have questions about time and attendance policies and regulations. Here are some of the most frequently asked questions.

What is paid time off?

Paid time off, also referred to as personal time off or PTO, is time that employees can use when they need or want to take time away from work. Some PTO programs allow employees to accrue time in each pay period. Others provide a set number of hours per calendar year that the employee can take at any time without the need for accrual.

When an employee requests time off, their supervisor needs to approve or reject the request. The supervisor will consider whether they have enough PTO hours available to cover the requested time. With an automated system, employees can view their PTO balances and plan accordingly. Upon approval, the employee takes their personal time off and still receives payment for the days they didn’t work. The time is typically coded differently on the pay stub, showing hours worked vs. paid time off and the rate of pay for each.

Some organizations allow employees to carry over their PTO hours from year to year, while others have a “use it or lose it” policy. Unlimited carryover can create scheduling issues, especially when supervisors plan for employees to have a certain number of hours available. However, not allowing any carryover can create frustration among employees who don’t take as much time off as others. You may be able to offer something in the middle with the option to carryover up to several days’ worth of PTO but not all unused hours.

How does overtime work?

The U.S. Department of Labor has federal overtime provisions in its Fair Labor Standards Act (FLSA). All eligible employees qualify for overtime pay when they work more than 40 hours in a workweek. The FLSA requires that overtime pay be at least one and a half times the employee’s regular rate of pay. This act doesn’t place limits on the number of hours an employee can work during a workweek, as long as they are 16 years or older and receive overtime pay for hours 41 and on.

California has a separate overtime policy that applies to all nonexempt employees, including domestic workers. Those who work more than eight hours in a workday qualify for overtime pay. However, various exemptions apply. Employees who do not meet certain requirements may be exempt from receiving overtime pay after working eight hours in a day or 40 hours in a workweek. Hours eight through 12 on a workday qualify for a rate of 1.5 times the employee’s standard rate of pay. In addition, hours worked in excess of 12 on a workday qualify for a rate of two times the employee’s standard rate.

What is absence management?

Absence management refers to the approach taken by an employer to manage employee absences. Absenteeism can create a number of issues, including disruptions, poor service, and a decline in productivity. Therefore, reducing absences is often a key priority for Human Resources departments. Absence management strikes a balance between accommodating employees who must miss work when they’re ill, injured, or otherwise unable to fulfill their duties and imposing penalties on those with excessive absenteeism.

An absence management policy includes the employer’s requirements for absences and the disciplinary actions for violations. In order to ensure that all employees understand and agree to the policy, an organization should provide it in writing and request that each employee sign off on it. Consistent enforcement maintains fairness across positions and departments.

An absence management policy also must outline how employees can inform their supervisors when they’re unable to come to work. Also, when they need to inform them, and what to do before returning to work. Ultimately, the goal is to handle employee absences and set guidelines for situations in which workers simply can’t perform their duties.

What is a time and attendance system?

A time and attendance system is a business application designed to track work hours. They are used in businesses of all sizes across every industry. Automation eliminates manual timesheets, tracking errors, and time-consuming processes. A time and attendance system typically includes some type of time collection device, such as a physical or web-based time clock, as well as software that stores and processes the data.

Time and attendance systems can operate as standalone platforms or integrate with other systems, such as payroll processing. The features of a time and attendance system vary widely, allowing businesses to select options that work for their needs. Some include scheduling, job costing, and other tools that simplify time and labor.

What is a time and attendance report?

A time and attendance report includes the hours worked by the employees of a business, along with any other compensation details. This may include PTO and/or leave hours used within a specific period of time. This type of report may also include the hourly pay rate of each employee and details of any deviations from the schedule, such as early in, early out, late in, late out, etc. A supervisor may use it to assess the attendance of their team members, verify hours, or compare payroll to the budget. Payroll processors also use time and attendance reports to issue accurate pay.

What is the best time clock for a small business?

The best time clock for a small business depends on the company’s budget and tracking needs. When you experience issues with buddy punching or time theft, a more robust workforce time clock with biometrics can help. If a company has employees working in various locations, a web-based or mobile app electronic time clock may be a better solution.

employee timekeeping system

 

Capable Solutions from WorkforceHub, Powered by Swipeclock

At Swipeclock, we’re experts in time clocks for small business clients. We understand the needs of small business owners, which is why we offer cost-effective workforce management solutions for time and attendance tracking. Our goal is to provide time simplicity, whether you’re tracking a handful of employees or watching your business grow and expand. Explore our wide selection of workforce solutions. Our suite includes time tracking, scheduling, applicant tracking, PTO time management, onboarding, and more. We also have a robust partner program for referral and resale partners.

When you’re looking for simplified time and people management, think WorkforceHub. We offer the best time tracking software available to small businesses, with time clock systems that meet the needs of every employer. Timekeeping, scheduling, and hiring solutions are user-friendly, accessible from anywhere, and integrated with other workforce solutions.

Take your time and attendance to the next level. Say goodbye to challenging time tracking issues, attendance struggles, and scheduling nightmares with WorkforceHub, powered by Swipeclock. We’ll help you take care of business more efficiently.

WorkforceHub Essentials includes Timekeeping (formerly TimeWorksPlus), onboarding, PTO, reporting and compliance.

WorkforceHub Plus includes everything in WorkforceHub Essentials plus hiring, geofencing, HR file cabinet, employee engagement, and benefits management.

Let’s set up a demo so you can see just how easy it is to replace cumbersome tasks with a flexible and configurable platform.

See also

 

 

Top image by Pavel Danilyuk on Pexels

 

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