Missing timesheets, confusing clock-ins, and delayed payroll aren’t just minor hiccups. They’re signs your business is flying blind.
That’s exactly why a time tracking policy matters. It works like a map for your team’s hours, guiding when to clock in, how to log work hours, and supporting better time management across the board.
Without clear direction, you’re left guessing. This creates problems when it’s time to process payroll, review employee time records, or stay compliant with labor laws.
As a result, these gaps not only create confusion but also open the door to inaccurate data, delayed approvals, and potential legal issues involving meal periods, overtime pay, and FLSA compliance.
According to Nguyen-Hadi Khorsand & Peráček study,
“These solutions improve accountability and trust by streamlining workforce management and ensuring compliance with labour laws.”
The real question, then, is: how do you create a time tracking policy that works for your team, your workflow, and your business? Let’s break it down.
Table of Contents
- What is a time tracking policy?
- 7 key benefits of having a clear time tracking policy
- What should you include in your time tracking policy?
- 7 common mistakes to avoid in your time tracking policy
- How do you roll out your time tracking policy successfully?
- What does a time tracking policy template look like?
What is a time tracking policy?
A time tracking policy is a written document that outlines the procedures for employees to record their work hours accurately.
It outlines the specific expectations for when to clock in and out, how to complete employee timesheets, and what constitutes paid work time.
The policy also identifies the tools or timekeeping systems employees will use. These might include a mobile app, a time clock, or even paper timesheets, depending on the business setup.
More importantly, this policy helps establish a clear standard for tracking employee hours. It also helps prevent confusion around meal periods, absences, and other types of time off, especially when tracking where an employee works during the day.
This includes both salaried employees and non-exempt employees who are subject to labor laws, such as the Fair Labor Standards Act (FLSA).
In short, it defines what is expected each workday in terms of tracking time. This makes it easier for businesses to maintain accurate time records across the entire team.
7 key benefits of having a clear time tracking policy
A clear and well-documented time tracking policy does more than just manage your team’s work hours. It builds structure, encourages accountability, and ensures your business remains compliant with key labor laws.
Here are seven key benefits your business can gain:
1. Accurate time records across the team
When everyone knows how to log time, you reduce errors and guesswork. A transparent process ensures all time entries, clock-ins, and clock-outs are recorded consistently, whether on a mobile app, time clock, or paper timesheet.
2. Smoother payroll processing
Accurate employee timesheets help streamline payroll processing, saving time and reducing costly errors. You’ll avoid underpayments, overpayments, and missed overtime hours, saving time and preventing payroll disputes.
3. Compliance with labor laws and FLSA
A strong policy helps you comply with state laws, federal law, and the Fair Labor Standards Act (FLSA). It clarifies how to handle meal periods, sick leave, and overtime pay for both salaried employees and non-exempt employees.
4. Fewer disputes and less confusion
When policies are clear, employees understand how to manage work time, log absences, and report time off. This clarity helps prevent confusion and reduces unnecessary back-and-forth between teams and HR.
5. Better visibility for managers
Real-time time tracking gives managers insight into how each team member spends their day and the total number of hours worked. It also helps adjust work schedules and plan workloads more effectively based on actual employee hours.
6. Stronger accountability
A shared system for tracking time builds a sense of ownership. Employees take responsibility for their time records, while employers build trust through transparent recordkeeping.
7. Improved profitability
Less time correcting errors means more time focusing on business growth. Accurate data also supports smarter budgeting, project planning, and long-term growth through detailed productivity analytics.
What should you include in your time tracking policy?
Once you understand the value of a time tracking policy, especially for small businesses managing lean teams, the next step is knowing exactly what it should cover.
A clear policy sets expectations, reduces confusion, and protects your business. Whether you’re managing full-time, remote, or non-exempt employees, these key elements help everyone stay aligned.
Here’s what to include
1. Purpose of the policy
Explain why time tracking matters. Mention how it helps maintain accurate time records, ensures compliance with labor laws, and supports smooth payroll processing.
2. Who does the time tracking policy apply to?
Clarify whether this policy covers salaried employees, hourly rate staff, contractors, or all team members. Include guidance for both remote and in-office teams.
3. Approved time tracking methods
List the approved tools your business uses to track time. These might include
- A mobile app
- A web-based time tracking system
- A physical time clock or time cards
- Manual paper timesheets
Make sure employees know which method they should use.
4. Clock in and clock out procedures
Set clear rules for
- When to clock in at the start of the workday
- When to clock out at the end
- How to log breaks, meal periods, or time off
- What to do if someone forgets to track their start time or end time
5. Timesheet submission guidelines
Explain how often employee timesheets must be submitted (daily, weekly, or per pay period). Include who reviews them and what happens if submissions are late or incorrect.
6. Paid vs. unpaid time
Define what counts as paid work hours. This may include
- Meetings
- Trainings
- Travel between worksites
Also, outline any unpaid periods, such as extended breaks or personal time, during work hours.
7. Handling absences, PTO, and sick leave
Explain how to log absences, request PTO, or report sick leave. Be clear on the process and how these impact total employee hours for the workweek.
8. Review process and compliance
Describe how time data is reviewed, who handles discrepancies, and what actions are taken in the event of recurring mistakes. Include a reference to any disciplinary action, legal requirements, or regulations under federal law or FLSA.
7 common mistakes to avoid in your time tracking policy
Even with a well-intentioned time tracking policy, things can go wrong fast if the policy lacks clarity or doesn’t reflect how your team actually works. These mistakes can lead to payroll issues, compliance risks, and inaccurate time records.
Here are seven mistakes worth avoiding:
1. Making the timekeeping policy too vague
If your timekeeping policy doesn’t explain when to clock in, how to log work hours, or which time tracking tools to use, your team members are left guessing. This results in inconsistent employee timesheets and delays during payroll processing.
2. Not defining paid versus unpaid work time
Unclear rules around work time, meal periods, and PTO can lead to underreported or inflated employee hours. When your team is unsure what constitutes paid time, such as meetings or preparation, you risk payroll disputes and FLSA violations.
3. Using one policy for all employee types
Non-exempt employees, salaried employees, and contractors have different needs. A single rulebook won’t address specifics such as overtime hours, sick leave, or state laws regarding work schedules and breaks.
4. Skipping accountability and disciplinary action
If employees are unaware of the consequences of forgetting to clock out or submitting incorrect time entries, errors accumulate. A firm policy includes clear steps for corrections and outlines possible disciplinary action.
5. Relying only on paper timesheets
Manual methods, such as paper timesheets or spreadsheets, are prone to error and delay. Without a digital time tracking system, it’s harder to collect accurate time records and meet recordkeeping standards under federal law.
6. Forgetting to update your time tracking system
As your team grows or shifts to a remote or hybrid setup, your policy should evolve too. Outdated procedures won’t align with your current tracking tools or accurately reflect real-time workflows.
7. Not training employees on time tracking procedures
A policy only works when everyone understands it. Skipping training leads to incorrect start times, missed breaks, and confusion during the pay period, especially for new hires or teams using a new mobile app.
How do you roll out your time tracking policy successfully?
To make your time tracking policy effective, your team needs more than just a document. They also need clear steps, simple instructions, and consistent support from day one.
Follow these five steps to roll it out successfully:
Step 1: Share the policy with all team members
Start by communicating the policy to everyone. This includes full-time, remote, hybrid, and in-office staff. Make it easy to access and take time to explain the basics, such as:
- When to clock in and clock out
- How to log work hours, meal periods, and time off
- Which time tracking tools to use, such as a mobile app, time clock, or digital platform
Step 2: Train employees on how to track time
Conduct a brief, practical training session to demonstrate to employees how to utilize your time tracking system. Walk them through how to:
- Record their start time and end time
- Correct mistakes in their time entry
- Submit employee timesheets before each pay period
This step is crucial for non-exempt employees who are responsible for accurately tracking overtime hours in accordance with the Fair Labor Standards Act (FLSA).
Step 3: Explain how to handle absences and paid time off
Make sure your team knows how to report:
- Sick leave
- PTO
- Unexpected absences
Clarify how each of these will impact their total employee hours during the workweek.
Step 4: Assign someone to monitor time records
Select a manager or supervisor who will:
- Review time cards and timesheets
- Identify errors or missing time records
- Ensure smooth payroll processing and accurate recordkeeping
Having a point of contact also helps your company stay compliant with both federal and state laws, especially as new employee monitoring laws are being rolled out across the US, EU, UK, Canada, and other regions.
Step 5: Keep your time tracking policy up to date
Since your tools and work schedules may change, your policy needs to reflect those updates. Review the policy regularly and adjust it when new processes, apps, or shifts are introduced.
Additionally, reinforce the policy through regular check-ins, internal updates, or brief reminders during team meetings.
What does a time tracking policy template look like?
Creating a clear and concise time tracking policy is essential for maintaining accurate records and ensuring compliance with labor laws. Here’s a basic outline you can adapt to your business needs:
Time tracking policy template
| Section | Details | Time Tracking Policy Example |
| 1. Purpose | Why time tracking matters: payroll, compliance, productivity | This policy ensures accurate timekeeping for payroll accuracy, compliance with the Fair Labor Standards Act (FLSA), and performance analysis. |
| 2. Scope | Who it applies to: full-time, part-time, remote, contractors | This policy applies to all employees, including those in salaried, hourly, part-time, and remote work arrangements. |
| 3. Timekeeping Method | Tools to track time: mobile app, time clock, paper timesheets | Employees must use Time Doctor to track their work time and submit their entries daily through the designated platform, whether on desktop or mobile. |
| 4. Regular Work Hours and Breaks | Define start/end times, meal periods, and breaks | Employees are expected to follow regular work hours from 9:00 AM to 5:00 PM, with a 30-minute unpaid lunch break from 12:30 PM to 1:00 PM. |
| 5. Timesheet Submission | How often and where to submit timesheets | Timesheets must be completed and submitted to the HR portal by 3:00 PM every Friday. |
| 6. Approvals and Corrections | Who reviews entries and how to correct errors | Supervisors will review timesheets every Monday. Corrections must be submitted within 48 hours of notification. |
| 7. Compliance and Disciplinary Action | Emphasize accuracy and outline possible disciplinary steps | Failure to maintain accurate records may result in a verbal warning, followed by a written notice for repeated offenses. |
While this time tracking template provides a foundational structure, it’s important to tailor the policy to your organization’s specific needs and consult with legal counsel to ensure compliance with all applicable laws and regulations.
Final thoughts: Is your team tracking time or just guessing?
A well-written employee time tracking policy sets more than just rules; it also establishes a clear framework for accountability and transparency. It sets the tone for how your team values work time, adheres to expectations, and remains aligned with labor laws.
But here’s something to think about,
Are you getting the full picture of how your team spends their time?
If your current setup involves manual timesheets, scattered time entries, or inconsistent clock-ins, you might be missing accurate tracking of total hours worked across your team:
- Accurate employee hours
- Reliable recordkeeping for payroll processing
- Built-in compliance with the Fair Labor Standards Act (FLSA) and employee monitoring laws
This doesn’t just create delays. It directly impacts your team’s focus and your business’s profitability.
That’s where Time Doctor comes in.
It’s more than just a time tracking software. It’s a complete solution packed with powerful features for today’s remote, hybrid, in-office, and distributed workforce teams. You can:
- Track work hours by task, client, or project
- Monitor team members in real time with smart screen monitoring
- Set automatic reminders to clock in and clock out
- Generate detailed employee timesheets for every pay period
- Integrate with your favorite tools for smoother payroll processing, attendance, team management and flexible pricing options that fit your business needs
- Spot productivity dips and reduce lost time using Time Doctor’s built-in Unusual Activity Report and workforce analytics
So ask yourself,
What could your business gain if time tracking felt automatic, accurate, and transparent?
Get a demo of Time Doctor and start turning your time tracking policy into real-time results.
Liam Martin is a serial entrepreneur, co-founder of Time Doctor, Staff.com, and the Running Remote Conference, and author of the Wall Street Journal bestseller, “Running Remote.” He advocates for remote work and helps businesses optimize their remote teams.