As a business owner who has employees, you must understand the laws and regulations pertaining to the Fair Labor Standards Act (FLSA). One of the many requirements is the federal law on timesheets.

Timesheets are required for hourly employees and salaried employees who earn less than $684 per week. These standards are in place to help companies ensure that they pay their workers their earnings.


What Is the Fair Labor Standards Act?

According to the Department of Labor, the FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for individuals who work in the private sector and in federal, state, and local governments.


Does My Business Have to Comply with the FLSA?

The FLSA applies to all businesses that meet the definition of enterprise. These include the following:

  • Federal, state, or local government agency
  • Hospitals
  • Schools, including preschools, elementary, middle, and high schools
  • Companies with annual sales in excess of $500,000
  • Businesses where employees engage in interstate commerce as part of regular tasks

If your business does not yet have revenue exceeding $500,000 or does not meet the other qualifications, it is still smart to use employee time cards for recordkeeping purposes. 

This tracking can help you if you ever encounter a situation where an employee questions their pay or if you need to refer to historical pay records in the future.


Are Timesheets Considered a Legal Document?

Yes, timesheets are considered legal documents. However, the federal law on timesheets does not require that they be kept or organized in a particular way. It only requires that the records exist and be recorded using some system. 

Standard time tracking methods include automated check-ins, written records completed by the employee, and time clocks.


Timesheet Rules for Hourly Employees

Employee time card law requires people who work on an hourly basis to have timesheets. There are specific rules required under the FLSA that must be implemented to ensure compliance. These include:

  • Records must include the name of the employee, the date they worked, the number of hours they work in a day, and the total hours they work per week.
  • Employees may not perform any work that isn’t recorded on a timesheet.
  • All hourly employees must receive payment for the time that they worked.
  • Clock-in and clock-out times should be rounded to the nearest 15 minutes.
  • All employees must work during their assigned shift unless the employer approves overtime or another shift.
  • The employer decides how many hours per week the employee may work.
  • If hourly employees work overtime, they must be paid 1.5 times their regular rate.
  • Employers may modify an employee’s time card as long as they are paid for the hours they work.

Hourly employees are considered non-exempt. This designation means that they are entitled to overtime if they work more than a 40 hour week or work on a holiday.


Timesheet Rules for Salaried Employees

Are timesheets a legal requirement for salaried employees? The timesheet rules for employees are not as strict. In fact, employee time card law doesn’t require timesheets for salaried employees who earn more than $684 per week. 

However, companies may still ask employees to use them. They can be very beneficial for tracking holiday and sick days and times when employees need a partial day off. 

Employers are required to pay their salaried employees the total amount of their base salary regardless of how many hours they work during the week. On the other hand, employees are required to work as many hours as it takes to complete their tasks. Employers cannot deduct pay from an employee who works less than half of a workday. 

Salaried employees are not entitled to overtime. Thus, if they work more than a regular 40-hour week, they will not receive any extra money in their paycheck for doing so.


What Is Required for Timesheet Compliance?

Timesheet compliance simply means that an employer complies with the recordkeeping requirements under FLSA. They must keep records of the time and dates that an employee worked. Other identifying information must be stored as well, including:

  • Employee’s full name and social security number
  • Address, including zip code
  • Birthdate, if younger than 19
  • Sex and occupation
  • Time and day of the week when each employee’s schedule begins
  • Hours worked each day
  • Total hours worked each week
  • The basis on which employee’s wages are paid
  • Regular hourly pay rate
  • Total daily or weekly earnings
  • Total overtime for the week
  • All additions or deductions from the employee’s wages
  • Total wages paid each pay period
  • Date of payment and the pay period covered by the payment

Timesheets are required to be retained for two years, while payroll records should be saved for three. 


What Happens If My Business Doesn’t Comply with FLSA?

Most violations occur when an employee blames an employer for not paying them for the time they worked. If the case goes to court, employers may need to prove their payroll records using time cards as evidence. When the time card records are inconsistent or missing, the employer may owe the employee money. 

If the employer is found to have willfully not complied with the FLSA laws, they may be prosecuted criminally and fined up to $10,000. Second convictions may result in imprisonment for those responsible for the business.


Should Salaried Employees Still Fill Out Timesheets?

Even though you are not legally required to have your salaried employees fill out timesheets, it isn’t a bad idea to do so. Doing so has a few particular benefits, including:

Easily Track Days Off

If employees are entitled to vacation or sick days, you will need a way to track them to make sure they are compensated appropriately.

Increase Productivity

Employees who put in significant overtime but don’t perform to an expected level compared to other team members may need help increasing their productivity. 

Identify Problems

If you have an employee constantly arriving late and leaving early, keeping timesheets can help you address the issue.


Need Assistance with Timesheet Compliance?

DATABASICS offers time tracking software to keep companies compliant with their timesheet recordkeeping. Contact us to see how our solutions can fit your organization’s needs for more information.