It may be necessary to incur overtime expenses to meet your production demands. However, it is vital to have accurate overtime records to help you stay on top of costs and to protect your company in case an employee claims to be owed overtime compensation. To stay on solid ground, you need to have detailed, accurate overtime records that are easily accessible.

Time clock rules

In administering FLSA, the U.S. Department of Labor (DOL) does not require any particular form of recordkeeping, and time clocks are not required. For all employees subject to minimum wage or minimum wage and overtime provisions, employers must keep a record of:

• Employee name, home address, occupation, sex, and birth date if under 19 years of age
• Day and hour when workweek begins
• Total hours worked each workday and each workweek
• Regular hourly pay rate for any week in which overtime is worked
• Total daily or weekly straight time earnings
• Total overtime pay for each workweek
• Total wages for each pay period
• Deductions from or additions to wages
• Pay period covered and date of payment

Finding the best system for keeping track of employee hours and overtime may require some careful consideration. Factors to consider may include the size of your workforce, your comfort level with technology, and how carefully you need to monitor your employees. The following are some clocking in and out options available today.

Punch-clock system

The old-fashioned time clock system that requires punching in and out with a paper card is by no means high tech, but it is affordable and still available today. However, more advanced systems that use computing to organize your data and generate reports are likely to be more cost-effective in the long run.

Proximity clocking

This type of system uses “proxy cards” assigned specifically to individual employees. Each of these cards contains a radiofrequency identification (RFID) chip, a capacitator, and an antenna. The card is placed near a scanner linked to a clock to record the employee's arrival time. RFID cards can also be used to restrict access to certain areas, depending on the level of security your company requires. The downside is that, unlike fingerprints, RFID cards can be lost or stolen.

Biometric clocking

Buddy punching (one employee clocking in for another) can be a real issue affecting production and costs. Biometric clocking completely resolves this issue. It uses facial recognition or fingerprints to verify identity and clock employees in.

PC clocking

A desktop or laptop can be used as a tool for clocking in and out. This can be set up in a couple of different ways: