The Time Is Now for Automated Timekeeping

April 11th, 2012 by Noam Yalon

Automated timekeeping is the process of electronically tracking employee work hours and pay. It is accomplished using electronic time clocks and software to collect and process the data. The electronic clocks can be setup to read fingerprints, proximity badges, key fobs, or they can be activated by computer or telephone.
Streamlining payroll procedures is more valuable than meets the eye. It is an essential tool for all businesses. The compliance environment is becoming more demanding in the face of increased regulations. Companies are working with narrower margins. Automated timekeeping provides a wide array of tangible and intangible benefits that mitigate the challenging environment. Many of the advantages are both immediate and tangible.

Advantages at a glance

  • Reduce Labor Costs – Employers can expect reduced employee labor by simply switching to an automated timekeeping system.
  • Reduce Clerical Work – The time required to prepare payroll will decrease while minimizing the cost of human error.
  • Employer Compliance – Employers who do not accurately track employee labor hours face a substantial financial and legal threat if a labor dispute were to arise.
  • Employee Behavior – Whether it’s salaried or hourly employees, organizations using automated timekeeping will find employees are more punctual and accountable for their hours. Employers can find tremendous savings by eliminating costly employee habits, such as “buddy punching,” leaving early, arriving late, long lunches, extended breaks, and so on.
  • Employee Morale – Employees will be much happier not having to worry about remembering in and out punches from the previous week or whether they are getting paid accurately for their time. They may also appreciate the greater consistency with which pay policies can now be enforced.
  • Schedule/Manage Your Workforce – Conveniently plan and track staff coverage across the entire organization. Make supervisors far more effective with convenient tools that promote employee accountability, adequate coverage, and control.
  • Manage Growth – Without properly managing employees, growing the company profitably becomes far more complicated and costly. Once the process is in place, there is no incremental cost of administration for adding employees.

Employees are classified as exempt or non-exempt with non-exempt employees entitled to overtime pay. It is recommended by labor attorneys that even employees exempt from overtime should keep time records in case their classification is ever found to be in error. Complying with federal and state labor regulations can be complex. Employers have long been saddled with the burden of maintaining detailed time and attendance records. As a practical matter federal and state wage and hour departments didn’t always expect small businesses to have detailed time sheets for each employee for every day worked. As technology has improved there has been a greater expectation of compliance. Historically a labor department receiving a complaint from an employee that claims he didn’t get paid overtime would require less detailed backup then is required today. Investigators now want to see for that employee, his time in and time out detailed on a daily basis for the period in question along with time out for lunch. Having that information verified electronically provides a concrete defense.

Please consult a local labor attorney for more information or for specific questions about your compliance responsibilities.  If you need a referral to a local labor attorney please give us a call.

Management Productivity
A company’s investment in payroll is typically the largest operating expense. Automated timekeeping is the first step to understanding and effectively managing that investment. There any many ways to track payroll including categorizing by department, location, job, division or customer. Combinations of these categories can be tracked as well. There is certain to be some way of tracking payroll that is of value to any company. 941 Payroll can help implement a one-time setup process for this and provide real time reporting that will be always available going forward. Reports are created in Excel or many other formats that may be requested.

How it Works
Electronic time clocks come in two forms, standard terminals or web based timekeeping. Standard terminals offer easy data collection through a card swipe, PIN or biometric (fingerprint) scans. Setup is very simple and data is transmitted to the database up to three times per day. Web-based timekeeping solutions allow employees the flexibility to clock in/out over the Internet without any special hardware. Data reporting and editing is done through the web and employee time data is always accessible. In addition, employees can view their time cards online.

Choosing a Timekeeping Solution

  • Review the Benefits – Visit the 941 Payroll website to download a spreadsheet to estimate the savings available for your company at
  • Try the Online Demo – With a variety of timekeeping features and programs, selecting a timekeeping device can take quite some time, especially if product demos require the involvement of the vendor. This site, however, offers instant access to our live online demo. Take advantage of this tool and you’ll better understand how user-friendly our product is and whether or not it will meet your needs. The demo can found at
  • Select a Time Clock – Once you’ve decided to automate your timekeeping solution, selecting the “best fit” time clock for your organization is the next step. Ask yourself some basic questions: How would you like to collect punches from employees? Biometrically? Through a badge swipe? Over the phone or Web? Via proximity badge? Consider is how your data will be sent to the Web from your office location? Your office should already have some sort of connectivity set up, whether it be your company fax line, your existing phone system, or your network.

If you think automated timekeeping might be right for you 941 Payroll offers a 30 day free trial.  Click here or call us at 877-941-9419.

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