Federal labor law requires employers to keep accurate records of an employee's work hours. Having employees keep track of their hours with a time card, whether by using a time clock or a hand-written document, requires an employer to abide by certain rules outlined by the Fair Labor Standards Act (FLSA).
The information that is recorded on an employee time card is viewed as an official document. The exact information that should be kept on record is not strictly spelled out, however, the U.S. Department of Labor suggests including the full date of the days worked with time in and time out clearly listed, along with the total hours worked for each day. Time cards for each employee should be kept on file for at least two years. The Department of Labor requires employers to keep archives available for an inspection. Keep the records in an easily-accessible place because you may be asked to provide further information based on the data listed on each time card. Keep an employee’s records for two years even if that person is no longer employed by you.
Accurate record keeping of hours worked by using a time card is essential in determining if your employees are due overtime pay. Workers are entitled to extra pay for any hours reported on a time card exceeding 40 in a given workweek. The FLSA describes a workweek as seven consecutive 24-hour days, which can begin on any day of the week you choose, or a total of 168 continuous hours. An employee must be paid, at minimum, a rate of 1 1/2 times whatever their normal hourly rate is for each hour of overtime. Some workers are exempt from overtime rules, such as certain types of salespeople, executive and professional employees, farm workers and others. See the link provided in the resource section below for further information on employee exemptions.
Develop standards you expect your employees to abide by when it comes to recording the hours they work, like exact starting and quitting times, amount of hours they must work each day, and how much time is given for breaks. Make sure each worker knows that falsely recording hours they have worked, or purposely punching a co-worker's time card, is forbidden. Spell out what disciplinary action you will take if these procedures are not followed, up to and including possible termination. In the event an employee challenges you legally over the amount of time they have been paid for, having guidelines explaining your procedure for documenting time worked will go a long way in helping your side of the argument.