“Do I Really Need Timesheets if I Trust My Employees?”

I trust my employees. Do I really need formal timesheets?

I hear this one all the time. Nobody ever likes my answer.

If an employee is nonexempt and subject to federal, state, or local hours-recording requirements, the employer needs accurate records sufficient to show the hours the employee actually worked. Period. I wish I had better news.

That does not necessarily mean you need to install a punch clock on the wall. Federal law, for example, does not require one particular timekeeping method. But the employer does need a reliable record of actual hours worked.

The interesting problem, to me, is why good employers often talk themselves out of keeping those records in the first place.

I’ve worked with organizations in overtime disputes that started with very ordinary decisions. Usually, the leader hired someone they trusted personally. Formal timekeeping felt unnatural and unnecessarily cumbersome between people who thought of the relationship as more than transactional.

Years later, the relationship changed, and the organizations were defending multi-state overtime claims. The missing records were a MASSIVE problem.

The lesson I took from those cases is simple: trust has its place in a relationship. A risk area that can expose you to back wages, liquidated damages, and attorneys’ fees is not that place.

Informality feels safe when the relationship feels comfortable

Small organizations rarely skip systems because someone sat down and affirmatively decided accurate records were a dumb idea.

It happens because “we know each other.” “We’re all friends here.”

The leader knows roughly when the employee works. The employee is performing well. Schedules move around. Staffing changes. Nobody wants to make a trusted person feel watched or micromanaged. Detailed time tracking feels absurdly corporate for a team of six, seven, eight people. “Just put down eight hours” is virtually frictionless; “if you worked eight hours and fifteen minutes, I need that logged precisely” is exacting.

I don’t use memes in my blog posts because I don’t feel like testing the outer bounds of fair use, but imagine Admiral Ackbar here:

IT’S A TRAP!

Goodwill can make a working relationship easier in so many ways. It cannot reconstruct years of hours worked after memories fade.

Accurate timekeeping does not require surveillance

Keeping “real” time isn’t as difficult as you may be thinking. Federal law does not require one particular timekeeping method for covered nonexempt employees. Employers can use a time clock, an employee-entered system, or another method, as long as the required records are complete and accurate.

For most covered nonexempt employees, the federal rule requires the employer to record the hours worked each workday and the total hours worked each workweek. The federal rule does not generally require a record of every start and stop time. Federal law also permits a simplified exception-reporting approach for certain employees who normally work a fixed schedule.

That leaves room, in many jurisdictions, to design something proportionate and workable for your team. A team that already uses almost any payroll software may need nothing more elaborate than using the tool it already has consistently.

The goal is merely an accurate record.

What changes in Maryland, DC, and Virginia?

Unfortunately, the analysis can’t always stop at the federal rule.

Consider the following. For employees covered by Maryland’s wage and hour laws, Maryland requires employers to keep records of the hours each employee works each day and each workweek. D.C. is more stringent: for employees covered by its time-recording requirement, employers must keep the precise times worked each day and each workweek. Virginia, by contrast, does not impose a generally applicable state rule requiring—for example—precise times worked for ordinary adult employees. Many states mirror federal requirements, but checking the federal law isn’t enough.

“We have a system” and “our system complies where our employees actually work” are two different questions. You do need to review the rules where your employees perform their jobs.

Time records also tell you something about the job

There are operational reasons to care about timekeeping even before a legal risk shows itself.

If an employee regularly works more hours than the job was designed to require, you want to know that for your budget, your workload distribution, and your performance assessments.

Maybe an employee’s workload has grown. Maybe one process is consuming far more time than anyone realized. Maybe a flexible arrangement works beautifully and gives you a model you can use elsewhere. You can’t tell any of those things from a payroll record built on everyone’s best guess.

Accurate time records are management information.

Common questions about employee timekeeping

Do hourly employees have to punch a time clock?

Probably not. Federal law does not require a punch clock or a particular timekeeping tool. Maryland, DC, and Virginia do not require time clocks either; accurate timekeeping in payroll software typically suffices. The employer does need complete and accurate records for covered nonexempt employees. State and local record-keeping requirements can be specific, so be sure to consult them.

What if the employee has a flexible schedule?

Flexibility and accurate timekeeping can coexist. Neither federal law nor the relevant laws in Maryland, DC, or Virginia require employees to work the same hours every day.

Check the law in every jurisdiction where the employee performs work. Remember, by way of example: D.C. requires records of precise times worked for employees covered by its rule. So “put in the same eight hours every day” is not always a good idea if it’s not true, even if it’s easier and doesn’t affect the amount of the next paycheck.

What if the employee sometimes forgets to log hours?

Treat missing records as something to fix rather than a reason to keep guessing or letting things slide.

Your process—whatever it is—should make corrections easy and repeated failures visible. Accurate timekeeping can be an ordinary job expectation, and an employer may require employees to follow a reasonable reporting and correction process. In other words, poor timekeeping can be treated as poor performance. However, at all times, the employer remains legally responsible for maintaining the records the law requires.

Does every employee need a timesheet?

Not necessarily, and “timesheet” is really shorthand for the larger record-keeping question.

Federal law imposes different record-keeping requirements depending on an employee’s status, and employers generally need more detailed hours-worked records for nonexempt employees. States and localities impose their own requirements as well, as do public and private funders.

Classification and applicable federal, state, and local law matter, as do your grants and contracts.

As a best practice, it often makes sense to keep exact time for all non-exempt employees, at a minimum.

What if an employee thinks exact timekeeping means I don’t trust them?

This one’s simple: explain what the system is for and show them how accurate records protect THEM (i.e., records make sure they get paid fairly for every hour) as much as they protect you.

You can trust an employee’s character and still keep employment records. In a healthy organization, the process should be routine and fairly applied such that nobody experiences it as invasive.

The records ultimately protect the relationship. Neither party has to rely entirely on memory years later or argue about whether one person was taking advantage of the other.

The employment relationships that feel safest over time are often a little more structured than not.

The bigger question: are your relationships overriding your systems?

If you recognize your organization in this post, the timesheet may be one example of a broader pattern: a relationship is doing work that should belong to a system. This is a breeding ground for resentment and inequitable treatment that can ultimately create risk.

A timesheet is not going to create a sprawling bureaucracy, I promise. You need enough structure that records are clear when trust is strained, someone leaves, or the facts are called into question.

It happens. I would know.

InTriplicate helps small organizations set up right-sized HR and people operations systems that fit the team they actually have. Apply for a fit call to see if we can build something right for you.

Lauren Agresti is the founder of InTriplicate, a DC metro area HR and people operations consultancy.

Sources

U.S. Department of Labor, Wage and Hour Division, Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act

29 U.S.C. §§ 211(c), 216(b)

29 C.F.R. §§ 516.1–516.3

Md. Code Ann., Labor & Employment §§ 3-403, 3-424

Maryland Department of Labor, Recordkeeping: An Employer’s Responsibility

D.C. Code § 32-1008

Va. Code Ann. § 40.1-29

Virginia Department of Labor and Industry, Payment of Wage / Virginia Labor Laws guidance