Employee Time Tracking System Types, Features, Benefits, & Laws

Any business that pays employees an hourly rate uses some type of employee time tracking system. From hand-written time cards to biometric fingerprint scanners, employers have to track that data in order to calculate paychecks correctly.

The question is, does their current time tracking system really get the job done?

For many businesses, an employee time tracking system needs to do more than just record clock-ins and clock-outs. Ideally, it should also have specific features that fit its business needs, especially in the trades, where understanding how to track employees time in construction requires a very different approach than a standard office setup.

For example, a construction company wouldn’t benefit from software that uses screenshots as proof of productivity. Rather, it would benefit from a feature like real-time GPS tracking, which records the entry and exit times for each employee at a job site.

So, why is time tracking so important? When correctly implemented, an employee time tracking system can boost productivity, streamline project management, and increase profits. It’s even helpful for employees, with benefits like improved self-management, reduced risk of burnout, and increased collaboration between individuals and teams.

Types of employee time tracking systems

While each employee time tracking system has its own unique set of features, it will generally fall into one of the following types.

Employee time tracking apps

One of the main benefits of time tracking apps is that they can go wherever your employees are. They have a lot of the same capabilities as other time tracking systems but with the advantage of mobility. 

These mobile solutions are a great fit for construction and field service businesses. If a company’s workforce moves between different locations, it makes sense that their time tracking method moves with them, and construction tracking demands exactly that kind of flexibility.

Time tracking apps allow employees to easily clock in and out, just like most digitized time tracking methods. In addition to that, they may also offer GPS tracking. This reduces time theft and buddy punching, and makes it easier for supervisors to track time spent on specific projects across multiple locations.

Employee time tracking software

This option has many of the same features as time tracking apps but is used on PCs instead of smartphones. The software is downloaded onto each employee’s computer, where they can track time worked, PTO, breaks, and more.

Employee time tracking software is pretty standard in office environments. It relieves the administrative burden of manually calculating work hours and is a good fit for anyone with a desk job. To prevent buddy punching, some software solutions take pictures of the person who’s clocking in or out.

Employee time tracking devices or hardware

While many time tracking solutions focus on software, some of them focus on hardware. These can take a few different forms:

• Smart cards function as employee ID badges and time cards at the same time. They’re swiped on a stationary device as the employee enters and exits the workplace, with their data being visible in the corresponding software. While this makes it easier to remember to clock in or out, it can be quite expensive to implement.
• Interactive time trackers can be placed on a desk, serving as a physical reminder to track hours, projects, etc. A popular design is shaped like an 8 or 12-sided die, big enough to fit snugly in the palm of your hand. These time tracking devices have features like offline usage, and the ability to sync with Outlook or Google calendars. The bad news is that they tend to have a large price tag. Plus, they operate on battery power. If the batteries run out without the employee realizing it, this could result in billable hours being lost.
• Fingerprint scanners and biometric time clocks are great systems for companies that need to verify an employee’s identity when they’re clocking in. However, this presents some concerns for the employee. Even if the company can be trusted with this type of personal information, the system is still vulnerable to being hacked. 

Manual employee time tracking systems

Using a pen and paper for time tracking is about as simple as it gets. So why are companies switching to digital time tracking software? Because manual time tracking involves so much more work and is much more prone to errors.

First, the employees have to write down when they started and stopped working. If they don’t calculate their total number of hours, the person processing payroll will. For companies with more than just a few employees, it could take hours to calculate and then double-check the data. In some cases, the person who’s processing payroll will waste valuable time chasing down employees to get the information they need.  

On the surface, manual time tracking costs almost nothing to implement – but that doesn’t account for the extra labor costs. Plus, if an employee wants to check on hours logged, remaining vacation days, etc., they won’t have easy access to that information.

Employee time tracking system features & benefits

If you want to do more than just track time, here are the key features to look for in an employee time tracking system. 

Feature	Benefit
Automatic Time Tracking	Hours worked are automatically logged down to the minute. This makes paychecks more accurate and gives project leaders insight into estimated completion dates.
Project Management	Managers can set priorities, track deadlines and progress, and establish budgets for each project.
Real-Time GPS Tracking	Managers can see where employees are in real-time, and verify which project they’re working on. Depending on the time tracking system, this feature may also automatically clock employees in and out as they enter and exit a geofenced worksite.
Alerts	Employees receive alerts if they forget to clock in or out, or are close to running into overtime. They can also receive notifications for upcoming deadlines.
Reporting and Analytics	Employee data is made available to administrative users, who can then generate reports, use it when processing payroll, or analyze patterns in productivity.
User Management	Administrators can set up user accounts with different levels of access to ensure security and privacy. Certain permissions are granted for employees, others for team leaders, and others for admins.

How to implement an employee time tracking system

Introducing a new employee time tracking system is one thing; getting employees to use it is another. Most people are naturally resistant to change, which is why it takes careful planning to implement this type of tool. These are some of the best ways to ensure that a time tracking solution gets used to its full potential.

Secure buy-in

Employee buy-in can be a difficult thing to get, no matter how big or small the change. This mainly happens because they simply can’t see how something would benefit them. To secure consistent buy-in, make it clear that this doesn’t just benefit the company; it also benefits them.

Communicate value

How does using an employee time tracking system benefit employees? Doesn’t it just give the company more insight into their daily activities? Yes, but this doesn’t necessarily mean that they’ll be micromanaged. Rather, it means they’ll have the data they need to better plan and prioritize work. For employees who bill their time to clients, a time tracking system can help ensure that they are paid accurately for the work they do. These benefits, once communicated, will help ensure adoption. 

Appoint influencers

If introduced correctly, change can be welcomed with open arms. Appoint influencers to lead change within your organization. After all, employees are more likely to listen to their peers than their superiors. Even if workplace relations are generally good, there can still be a disconnect between leadership and employees. If other employees are recommending the time tracking system, though, that can make a big difference in the overall adoption.

Host regular system training

Employee time tracking systems usually have a wide range of capabilities. If the company and its employees want to benefit from them, they’ll have to learn how those capabilities work. Training should be provided as the system is being implemented, but refresher courses should also be held. This will help round out each employee’s knowledge of the system, and fill any gaps that still exist.

Offer rewards or incentives

Positive reinforcement can be a powerful tool to get everyone on board with a new time tracking system. Let employees know that when they correctly log hours, track projects, or use other features, they’ll be rewarded for their efforts. The rewards could take the form of a gift card, paid time off, or even a cheesy trophy. This should encourage employees to be consistent, and boost workplace morale at the same time.

What a Successful Implementation Looks Like

The steps above can make a meaningful difference, but seeing them play out in a real company makes the stakes clearer. Wagler Custom Homes, a commercial framing company based in Indiana with nearly 200 employees, had cycled through multiple tracking methods, none of which gave project managers reliable data. Login problems caused payroll delays every week, and employees clocking in from the wrong location or staying clocked in after leaving job sites quietly pushed labor costs over budget on fixed-price contracts.

After evaluating four different solutions, they selected one based on a specific set of requirements: GPS verification, real-time cost coding, and bilingual support for their crew. Within the first week, employees adapted quickly, buddy punching stopped, and payroll accuracy improved dramatically.

Read the full Wagler Custom Homes case study to see what that rollout looked like from day one.

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Must-know legal & ethical considerations

U.S. businesses are regulated by the Fair Labor Standards Act (FLSA), which sets standards for overtime pay, minimum wage, and child labor. As a result, businesses must accurately track employee hours and keep accurate timesheet records. This ensures that employees are getting paid what they deserve, and reduces the risk of litigation due to hour or wage disputes.

Legal considerations

US businesses are required to follow federal labor laws set by the FLSA, but they may have to follow state standards as well, including GPS tracking laws that vary significantly by state. Federal labor laws regarding time tracking dictate that:

• Employees must be paid for the time that they work.
• The rate of pay for each employee must be at least the federal minimum wage, which is $7.25/hour.
• If a non-exempt employee works over 40 hours per week, employers must pay them 1.5 times their normal hourly rate.
• Employers must maintain accurate records of clock-ins and clock-outs, breaks, and overtime.
• Employees must be classified as either exempt or non-exempt for overtime.

There’s one thing that these laws all have in common: they depend on employers tracking employee time. If that isn’t done accurately, then businesses won’t be in compliance with these regulations. This can open them up to potential fines, lawsuits, or other penalties that could have been avoided with the right time tracking system.

Ethical considerations

Time tracking methods can range from simple to complex, and some of them may not be all that ethical. This is due to the extent of employee monitoring that some employers use, and workers do have employee privacy rights that place real limits on what employers can track.

Some time tracking solutions include features like taking periodic screenshots on work laptops, monitoring browsing history, and other types of data gathering.

These types of features can be genuinely helpful for generating insights into how employees are spending their time. However, they can also give employees the impression that their employer doesn’t trust them. This can foster a toxic workplace culture, and result in lowered employee satisfaction.

Thankfully, there are plenty of time tracking solutions that effectively track time without making employees feel like they’re being spied on.

If a business wants to promote fairness in the workplace, they should implement an employee time tracking app like Workyard that’s good for both the employees and themselves. Workyard is designed to deliver for construction business owners and executives who need both accountability and worker trust.

How to stay compliant using Workyard’s employee time tracking system

U.S. labor laws are clear: businesses have to keep accurate records of hours worked by employees. In some cases, there will also be state or local laws that regulate the way businesses track employee hours.

Because this entails tracking and recording a ton of data, from clock-ins and clock-outs to personal time off, an accurate time tracking system is crucial for compliance.

Keeping accurate employee records requires an employee time tracking system with specific features, and Workyard is designed with those requirements in mind. Here’s what to expect from Workyard’s construction time tracking app:

• Live GPS tracking that provides real-time data on who’s clocked in, where they are, and which project they’re working on.
• Geofencing that automatically detects each employee that enters or exits a worksite. This feature improves the accuracy of tracked hours and guarantees that an hour worked is an hour paid.
• Integrations that let the time tracking app seamlessly share data between payroll and accounting software, including the ability to sync hours directly through QuickBooks timesheets.
• Mileage tracking that records travel time and mileage, simplifying expense reporting.
• Alerts that help employees comply with break laws and simplify tracking overtime before it becomes a compliance issue.
• Intuitive user interface that makes implementation and continued use easier for everyone involved.
• Customer support in the form of email or phone support, plus a library of online resources. If there are any problems or questions while using the time tracking app, customer support can quickly resolve them.

For construction companies still piecing together hours from paper cards and text messages, the math is straightforward: the cost of inaccurate time tracking almost always exceeds the cost of fixing it.

A purpose-built construction time tracking software gives field teams a faster way to clock in and gives the office verified, payroll-ready data without the manual follow-up.

If you’re evaluating options, Workyard offers a free trial with no commitment required.

Sign up for a free trial of Workyard today