6 Reasons Why You Should Track Hours Worked
Whether you’re an owner of a business, an employee, or a freelancer, properly documenting how you invest your time on a day-to-day basis is vital to your productivity and success levels.
In a busy world and where every minute counts, it’s essential to understand the benefits of tracking time. Whether you’re an owner of a business, an employee, or a freelancer, properly documenting how you invest your time on a day-to-day basis is vital to your productivity and success levels. Becoming more aware of time will allow you to acknowledge where it’s being misused and wasted.
Every day we are faced with challenges from both our personal and professional lives causing us to lose track of time. Finding a solution to help identify how you spend your time can avoid wasting precious minutes that you can’t afford. Some may catch themselves reflecting on how their day went and how many hours their team invested on a project at work only to realize they are too busy to remember.
This article will provide six reasons why you should track hours worked and help identify barriers that stand between you and your goals.
Proper Time Card Documentation
Gaining a complete understanding of how much your employees are working can provide great insight into topics such as productivity levels, attendance, proper invoicing, and much more. Improving efficiency and providing transparency into the work process starts with delivering an accurate representation of time data. By doing so, you’ll be able to identify kinks in the chain and adapt accordingly.
There are many reasons why it’s essential to obtain time card documentation for your business. Paycor reports that employers are required by law to keep records showing how an employee’s wage is determined for at least two years. The requirements included time cards, schedules, and wage rate tables. A standard solution to satisfying this law is by taking advantage of modern technology and implementing an online time tracking system. These systems will not only calculate hours worked but also securely store them for quick access when needed.
Improved Payroll Accuracy
Delivering accurate paychecks to employees is an essential factor to operating a successful business. Accomplishing this task is by obtaining precise hours to calculate payroll. According to the American Payroll Association, a staggering 49% of U.S. employees will leave a job after only two mistakes with their paychecks. Payroll errors could also impact your turnover rate and cause your company to gain a negative reputation. The same report states that companies who use a timekeeping solution with payroll capabilities improved accuracy by 44% to have a payroll error rate of only 2% or less. These numbers can often be an eye-opener, but the reality is that payroll has a significant impact on companies and their operating way.
Along with underpaying employees, your business could also be overpaying employees. Each organization has a set payroll budget, and when spending is outside of that budget, your bottom line is affected tremendously. But how would you know if you’re not adequately tracking hours worked?
Stay in DOL Compliance
Aligning your organization to fully understand the Department of Labor laws is very important for maintaining compliance guidelines. For example, the FLSA requires employers to pay non-exempt employees at least the minimum wage for all hours worked. Additionally, FLSA also requires workers to be paid at least 1 1/2 times the regular rate of pay for hours worked in excess of 40 in a workweek.
If hours aren’t properly tracked and documented, your company may not comply and potentially face hefty fines.
Knowing When Employees are Owed Overtime
In addition to federal labor laws, individual states possess their own. Overtime laws vary state-to-state, and not all are straightforward to understand. In a state such as California with complex overtime rules, knowing when employees are owed overtime can be a challenge. For example, if an eligible employee in California works more than 8 hours in a day and more than 40 hours in a workweek, they must be paid 1.5 times their regular rate of pay.
Overtime was introduced in 1938 by the Fair Labor Standards Act. Overtime laws were created to protect employees from being taken advantage of and being forced to work long shifts without proper compensation. Having a system where employees’ overtime hours are tracked, documented, and stored prevents employers from breaking laws. Furthermore, it allows business owners to understand if overtime is worth the investment based on production produced.
Keep Your Work Schedule in Order
Drive your business forward by knowing who’s on the clock. Creating a robust and detailed work schedule for yourself and team members can provide timely communication. Whether you operate a large company with varying shifts or a small business with a fixed schedule, tracking hours worked allows organizations to prevent overscheduling.
Just hoping everyone shows up when they’re supposed to may not be good enough. All successful companies need an orderly flow. Allowing employees to know when they work helps them focus on their job and ensure significant shifts are covered. After all, you cannot perform work without the workers.
Protect Your Health and Well-Being
Perhaps the most important reason to track time is preventing damage to your physical and mental health. We are all guilty of getting caught up with a task, and before we know it, it’s later than we thought. During this time, you may have skipped lunch or forgot to grab a drink of water - which could result in bad health. Or you are possibly so overwhelmed and stressed that you don’t realize it because you’re caught in the moment.
Staying on top of time and knowing when to take a break allows for better health, improved mood and increased performance capacity. Just as much as your physical health needs rest, the same goes for your mental health. According to the American Psychological Association, a study of individuals who took a five-minute break halfway through a 45-minute task performed better than those who continued without a break.
Understanding when it’s time to take a break will significantly benefit your health and work production. Keep in mind that Rome was not built overnight.
No matter how successful your company may be, there is always room for improvement. Sometimes these improvements are minor and other times, they’re on a larger scale. Nonetheless, identifying where time is invested is a great starting point for employers and their employees.
Paying attention to the issues discussed, you will understand why tracking time and hours worked is important. Now it’s up to you to implement the appropriate tools and solutions to make it happen. As a result, you will save time, keep your company in compliance and maintain a healthy lifestyle.