Do I Have to Pay When an Employee Forgets to Clock In?

Key Takeaways: Do I Have to Pay When an Employee Forgets to Clock In?

• ✔You have to pay employees for all hours worked, even if they forget to clock in.
• ✔Set clear consequences for missed punches by updating your employee handbook and following through on discipline.
• ✔Only deduct time for breaks if they were actually taken, and make sure your team understands the policy.
• ✔Expect small time differences, but fix any major errors to keep payroll accurate.
• ✔Use a simple time clock system to make it easier for employees to punch in and for HR to fix mistakes.

One of the biggest frustrations employers face is getting employees to clock in and out. This isn’t unique to small companies with new time management policies, as large businesses spend hours each month training employees on how to clock in and make adjustments when they forget to correctly account for their hours.

This has led some employers and staffing agencies to ask: Do I really have to pay these employees? If they don’t record their hours properly, how can I know they are honest about when they arrived and left? Regardless of how frustrating these mistakes are, employers still have to pay employees. Learn what the law says about employees who fail to clock in and what managers can do about this issue in this article. It's also important for employers to know if employees are clocking in. 

What Are the Federal Recordkeeping Requirements?

According to the Fair Labor Standards Act (FLSA), employers must keep records of the number of hours each employee worked -- regardless of whether employees clock in and out. This means that if an employee forgets to clock in and still works a full day, your payroll team has to adjust the schedule to account for the hours and pay the employee accordingly.

According to the FLSA:

“The Act requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned...Each employer shall preserve for at least three years payroll records, collective bargaining agreements, and sales and purchase records.”

Oftentimes, employers ask whether they can dock employees' pay for failing to clock in or out -- or withhold pay entirely that day. They cannot. Employees must be paid for the exact number of hours they worked, regardless of whether or not they remembered to clock in.

What Disciplinary Options Do Employers Have?

If an employer can’t dock an employee’s pay for failing to clock in or out, they can take other measures to reinforce the importance of accurately measuring time worked. For example, a human resources representative can contact that employee’s manager to alert them to the time clock issue. In this case, the burden falls on the manager to ensure the employee is clocking in and to speak with him or her if the problem persists.

If you plan to implement disciplinary measures for failing to clock in and out, make sure you include them in your employee handbook. Any changes to the policy or handbook should be reviewed with your staff to ensure they understand the consequences of not clocking in.

Most companies that implement similar measures create a process with verbal and written warnings, followed by probation, and then termination for employees who do not clock in if there are a certain number of violations over a set period of time. This shows that the employee exhibited a pattern of behavior in which they refused to use the company time clock tools or disregarded management's instructions on how to clock in, rather than punishing employees for the occasional human error most people are prone to.

Teach Employees to Account for Breaks

While the main clock-in and -out process typically isn’t confusing for employees, there may be confusion about when to clock out for breaks—and what HR can do if they don’t.

Breaks apply to both 15-30 minute increments set out by the U.S. Department of Labor, and 30-60 minute lunch breaks created by the company. When adjusting an employee’s schedule, it is illegal for an employer to dock time for breaks or lunch unless the employee actually took that time. If an employee says they worked from 8 a.m. to 5 p.m., an employer can’t record an hour-long lunch unless a manager verifies the break as well.

While this law protects employees from not getting paid for work they did, it also protects employers. Employees can be disciplined for failing to take their breaks or for taking them at the wrong time if it is clearly stated in the employee handbook. For example, if an employee works from 8 a.m. to 4 p.m. and says they took their lunch break from 4 p.m. to 5 p.m. as an excuse to leave early.

Employees also need to take their required breaks, so the employer doesn’t have to pay unapproved overtime because workers decided to keep going when they needed to clock out and rest.

Your human resources department needs to clearly explain the break policy to both employees and managers, and managers must enforce breaks throughout the workday. This way, employees will be fairly paid, won’t be overworked, and won't commit timecard fraud that harms your company.

Minor Time Clock Discrepancies Are Unavoidable

It’s natural that there will always be a slight difference between the hours an employee works and the time they clock in and out. For example, an employee might clock out, pack their belongings to go home, and then unexpectedly stop to help a coworker for 15 minutes on their way out the door. However, this additional work time is insignificant, and it’s unlikely that the team member writes to HR and requests a payroll adjustment.  

To solve this, many companies implement policies that utilize employee time tracking to round punches up or down to the nearest quarter hour. For example, if an employee clocking in a 7:55, the punch rounds up to 8:00. There is also a middle point where punch in at 8:07 round down to 8:00 while punch ins at 8:08 and beyond round up to 8:15. Depending on the time clock tool that you have, you can choose to tag the exact time or use this rounding method for easier payroll management.

It’s okay for your time clock to be a few minutes off from what your employees actually work, but you need to address any major discrepancies, so your records, payroll, and employee hours all line up.

Invest in a Time Clock That’s Easy to Use

If you’re frustrated by employees who can’t clock in or out correctly and your human resources department hates fixing time sheets each month, consider switching to a time clock tool that both parties can appreciate.

OnTheClock is an online time clock, meaning employees can clock in or out wherever they have an internet connection. Brands can also geofence the app so team members can only clock in when they are on or near the premises. OnTheClock is also easy for HR teams who need to quickly make adjustments in a simple interface.

You always have to pay employees for the time they work, but you can make it easier for them to clock in and help your HR team make changes with the best tool for the job.