How to track employee time and attendance effectively: 3 best ways
Accurately tracking employee time and attendance (T&A) enables businesses to significantly reduce or eliminate payroll errors, simplify workflows, improve productivity, manage labor costs, and ensure compliance with federal, state, and local labor laws.
Businesses of all sizes, from small startups to enterprise corporations, benefit from staying on top of employee attendance and managing their workforce costs. In this guide, we’ll examine the advantages of tracking employee attendance, the value of effective time management, and the tools that simplify the process.
What is employee attendance management?
Employee attendance management is the process of recording employee work hours, including when they clock in and out, their breaks, and their absences. Time and attendance are usually managed with an electronic timekeeping system to ensure accuracy and compliance with labor regulations.
In addition to keeping track of hours and adherence to work schedules, time and attendance management software can provide insights into how and where employees spend their work hours, attendance patterns, overtime hours, and labor costs. It can also assist with scheduling, fraud prevention, and overall productivity.
Why is tracking employee attendance important
Employee attendance tracking ensures accurate payroll processing, aids businesses in complying with labor laws and regulations, and provides companies with a clear understanding of how to manage their resources efficiently.
Improves employee accountability
Time tracking ensures that your employees’ work hours are accurately accounted for, reducing errors and providing a reliable attendance record. Depending on the system, time tracking can minimize time theft and fraud. Modern software-based solutions offer features that verify an employee’s identity using biometrics when they clock in and out, and employee location can be verified using geolocation technology. These two features help stop “buddy punching,” the practice of one employee clocking in/out for another.
Systems with real-time data collection immediately alert employers to problematic employee attendance patterns, allowing for quick identification and resolution of issues like lateness and absenteeism.
Streamlines processes, including payroll
Time and attendance tracking makes quick work out of many workforce management processes. Some software-based platforms integrate with payroll. In addition to accurately tracking and approving employee hours automatically, they provide real-time insight into hours and attendance and how they affect payroll. Modern T&A solutions enable businesses to customize workflows to their specific needs, like setting up advanced custom alerts and automated policy configurations.
Ensures compliance with labor laws
Time and attendance solutions can automatically create and enforce overtime and other policies that are compliant with federal, state, and local labor laws, regardless of where your employees work. While most T&A solutions let you update changes to labor laws and regulations, the onus is on you to keep track of these constant changes and then manually update your system to comply with the new requirements. A solution like Rippling tracks evolving labor laws, updates the system, and flags if you are out of compliance, eliminating this time-consuming step.
Enhances overall productivity
Beyond tracking time and attendance, T&A software can provide organizations with invaluable insights into their workforce. Real-time tracking of labor costs and productivity helps companies manage budgets more effectively. You can monitor overtime and understand its impact on your bottom line, enabling you to take proactive measures to control labor costs. Additionally, some platforms allow you to track where an employee spends their time, broken down by client, location, and project. This is instrumental in identifying inefficiencies, optimizing resources, and boosting productivity.
Challenges of tracking employee attendance
Employee attendance significantly impacts business operations, which is why time and attendance tracking is so important. However, accurate tracking can be challenging, especially for businesses with remote or expanding teams. These are key challenges that companies might face:
Managing attendance for remote and hybrid workers
The growth in remote and hybrid workers has brought unique challenges for tracking work hours and employee attendance. It can be difficult to verify remote workers (or digital nomads) are actually putting in their required hours, making it difficult to manage their time and measure their productivity.
Handling shift-based or flexible schedules
The complexity of shift-based and flexible schedules makes tracking important aspects of the employee’s workday difficult. Incorrectly logging when workers start and finish their shifts, take their breaks, and work overtime can result in payroll errors, violating labor laws, and ineffective workforce management. Tracking down and fixing problems can be time-consuming for managers and frustrating for employees.
Tracking labor costs
You can’t control labor costs and improve profitability without staying on top of your employee’s time. Accurate monitoring of when they clock in and out can reduce the risk of overpayment, cut back on unnecessary overtime, and help you keep labor costs aligned with budgets and projections.
Preventing time theft or inaccurate reporting
Some time tracking systems, especially manual ones, make it challenging to prevent time theft and inaccurate reporting. Traditional time and attendance reporting methods using spreadsheets, time cards, and time clocks are easy to use and low cost, but they can lead to errors, inefficiencies, and even fraud. With these systems, there’s no way to know if an employee is truthfully reporting their hours, taking extra breaks, or even reporting to work at all.
Ensuring compliance with labor laws
Businesses must maintain compliance with federal, state, and local labor laws. Labor regulations are complex and ever-changing, and non-compliance penalties are steep. Businesses must keep accurate records of employee hours, absences, and any time-related adjustments. Failing to do so can result in serious legal and financial troubles in the case of an audit, payroll dispute, or other regulatory or legal matter.
Integrating attendance tracking with payroll systems
Integrating T&A and payroll systems can be a challenge. If the systems aren’t integrated, you may have to download time and attendance data and then manually move it to your payroll platform. Manual entry can result in a host of payroll issues that your HR and finance teams have to fix, including compliance violations, inaccurate paychecks, and delays in paying your employees.
3 best ways to track employee attendance
Effective employee time and attendance tracking is essential for managing your workforce, staying compliant with labor and tax regulations, and monitoring labor costs. Here’s how to keep track of employee attendance:
1. Employee time and attendance software
Businesses use time and attendance software to track and manage the working hours of their employees. It automates the process of recording when employees clock in and out of work, as well as any breaks they take during their shifts. Time tracking ensures accurate payroll processing, helps businesses comply with labor laws and regulations, and provides companies with a clearer picture of how to manage their resources effectively. The best T&A software also integrates with payroll systems to ensure employees are compensated accurately based on hours worked.
Rippling Time & Attendance simplifies tracking by syncing seamlessly to payroll, automatically automating calculations and deductions. You can create automated workflows to manage hourly employees with ease. With Rippling, you can customize policies to fit your company’s requirements, from custom pay types to break policies. Built-in compliance automatically enforces federal, state, and local labor laws, identifying non-compliant time cards to protect your company from potential violations. You can specify how your employees record their time, whether via mobile app, kiosk, or desktop. Rippling also gives you the option of geolocated check-in to confirm accurate attendance.
2. Biometric systems
Biometric systems can track employee attendance in several ways, including facial recognition, iris recognition, and fingerprint scans. When placed at a business’s main or employee entrance, a biometric system can restrict access to authorized personnel and automatically clock them in. These systems all but eliminate buddy punching because an employee’s biometric ID is unique to them.
Employees go through the same process when they leave for the day, and their hours are automatically recorded and stored in the T&A system. If the tracking and employee attendance software is integrated with a payroll platform, T&A data is automatically transferred to a central location and can be used to process payroll accurately and automatically.
3. Mobile or cloud-based tracking
Mobile or cloud-based time and attendance tracking is a modern method of recording employee hours using mobile apps and linking, via the internet, to T&A or workforce management software hosted remotely.
A self-service mobile app enables workers to perform multiple tasks on their phones, including clocking in and out, reviewing work schedules, requesting time off, and managing time from just about anywhere. This is invaluable for connecting businesses and their remote, hybrid, and mobile employees.
Some mobile and cloud-based solutions add location geofencing functionality to their systems. This technology enables businesses to track employee attendance at work based on their geographic location. This helps reduce time fraud by ensuring employees can only clock in and out when physically located at their authorized work location.
How NOT to track employee attendance
The goal of time and attendance tracking should be accuracy and improved productivity. However, many companies, especially smaller businesses, rely on outdated and inefficient tracking methods. While these procedures may seem simple and cost-effective, they can result in payroll errors, time theft, and compliance risks, not to mention the hassle and costs of tracking down and fixing mistakes. Some common T&A methods to avoid include:
1. Punch cards
There are multiple drawbacks to punch cards. First, they only store a small amount of information, usually just the employee’s name and timestamps. This manual system is prone to errors and lacks the cost savings and productivity benefits of modern systems. Punch cards lack verification and open the door to buddy punching and other types of fraudulent use. Entering the data from the punch cards is a laborious and error-prone procedure. This system lacks any kind of real-time tracking and is highly susceptible to physical damage or loss.
2. Paper timesheets
Like punch cards, paper timesheets hold limited data and are easily damaged or lost. In addition to accuracy issues, they’re labor-intensive, inflexible, and present security risks if lost or stolen. Even something as simple as poor handwriting can introduce errors and require time-consuming individual follow-ups from your finance or HR teams.
3. Manual spreadsheets
Manual spreadsheets also come with several drawbacks. They’re time-consuming to use, error-prone, lack visibility and reporting capabilities, and are a security risk. If they’re damaged, lost, or stolen, you’ll fall out of compliance with the Fair Labor Standards Act’s recordkeeping provisions and face penalties for each violation and each employee. Manual spreadsheets don’t scale well, either. They may serve an immediate need but quickly become inadequate and cumbersome as your workforce expands.
4. Attendance registers
Another manual T&A solution best avoided is the use of attendance registers. They’re used to record the presence or absence of employees. However, they have the same drawbacks as the previous solutions. They’re prone to human error, inefficient, lack real-time data and analysis, pose security concerns, and they don’t scale. Using manual systems like attendance registers can result in payroll mistakes, compliance issues, time theft, and increased demands on your HR and finance departments (or you, if you’re running a small business).
Automate employee time & attendance tracking with Rippling
Rippling Time & Attendance automates and simplifies time tracking from clock-in to paycheck, without manual data entry and errors, syncing issues, and potential compliance violations.
With Rippling, time clock integration is part of a comprehensive employee management system. You choose how your employees track their hours—via a tablet kiosk, mobile app, or their computers—and send them straight to payroll, without annoying and time-consuming manual work. You can restrict check-in to a specific place via geolocation, requiring a selfie when clocking in, or creating a touchless experience via QR code. You can also set up automations to send payroll-related reminders to employees and managers, create custom alerts and pre-built policies to ensure compliance with labor and tax laws, and more.
Rippling’s real-time attendance reports track more than just employee hours. You can see where their time is being spent—and what it’s costing you—broken down by any characteristic you choose, including by client, project, task, or location, giving you valuable insights into attendance, labor trends, overtime costs, and more.
With Rippling, you can fully integrate T&A with other systems. Approved hours sync seamlessly to payroll, and calculations for paid time off (PTO) or any benefits deductions are done automatically. No CSV imports, spreadsheets, or headaches.
Say goodbye to compliance worries. Rippling automatically enforces overtime, sick leave, meal break, and other federal, state, and local labor laws, and flags any non-compliant time cards to ensure your company is never at risk of financial penalties.
Rippling Time & Attendance not only automates time tracking and payroll, but also ensures you stay compliant and make better decisions on managing your workforce with real-time visibility into your labor and productivity metrics.
This blog is based on information available to Rippling as of October 1, 2024.
Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
