You already know that timesheets are a must for your hourly employees. Not only do timesheets provide time records for the number of hours worked by your employees each pay period, but under the Fair Labor Standards Act (FLSA), as a small business owner, you’re actually required to track time and keep accurate records—like timesheets—for non-exempt employees.
But what about salaried employees? What’s the timekeeping procedure for employees that are paid on a salary basis? Do they need to track their work hours on a timesheet or timecard as well?
Understanding the laws around timesheets
As mentioned, federal law mandates that small business owners keep accurate records for all non-exempt employees—and that includes time records. Under the FLSA, employers must log the time and day an employee’s workweek begins, the total work hours each workday and the total hours the employee worked each workweek.
How you log and track those hours is up to you (according to the Department of Labor, “employers may use any timekeeping method they choose. For example, they may use a time clock, have a timekeeper keep track of employee's work hours, or tell their workers to write their own times on the records. Any timekeeping plan is acceptable as long as it is complete and accurate—but regardless of what method you use, you need to accurately track work time for your non-exempt employees.
So, in order to determine whether salaried employees need to fill out timesheets, it’s important to understand the difference between non-exempt and exempt workers.
Non-exempt workers are eligible for overtime pay—which means if they work any extra hours over 40 during a single workweek, they get compensated for those overtime hours (which is at least one and a half times their regular rate of pay).
Exempt workers are exempt from overtime pay—so even if they work more than 40 hours in a workweek, they’re not eligible for overtime pay.
So, whether a salaried employee has to fill out a timesheet will come down to whether they’re considered exempt or non-exempt. If they’re exempt, which a majority of salaried employees are, you’re not required to have them fill out a timesheet—but if they fall under the non-exempt category (for example, if the employee’s salary is less than $684 per week) then they would need to fill out a timecard.
Why you should have your salaried employees fill out timesheets—even if you’re not legally required to do so
If your salaried employees are exempt, you’re not legally required to have them fill out a timesheet with their work hours—but just because you’re not required to doesn’t mean that you shouldn’t.
The practice of keeping time logs for all your employees—including salaried employees—has so many benefits outside of compliance. There are a host of reasons you should have salaried employees fill out timesheets, including:
- Tracking and monitoring vacation and sick leave. If your salaried employees are entitled to sick time and vacation time, you need to track a) how they’re accruing leave, and b) when they take that leave in the form of sick or vacation days. Having your salaried employees fill out timesheets helps you more efficiently track, monitor, and manage their leave—and makes the entire process easier for you and your human resources team.
- More accurate project management. If you have employees working on a variety of different projects, you need to know what working hours are going towards which projects; otherwise, it’s difficult to evaluate how each project is progressing and whether you need to shift employees between projects to get things done. Having salaried employees fill out timesheets, and then comparing their working hours to the total working hours of the project they’re assigned to, can give you insights into how projects are moving along—and whether you need to make any changes to your work assignments.
- Keep burnout at bay. You want your employees to have work-life balance; if your employees are working too much, it could be a recipe for burnout—which isn’t good for them or you. Having your salaried employees fill out timesheets can help you identify if and when employees are putting in too many hours—and help you get them back on a regular schedule before they completely burn out.
- Increased productivity. If a salaried employee is working 50+ hours every week and still not performing at the level of your other team members, it lets you know that there’s an opportunity there to increase productivity—and you can get that employee the training or support they need to get things done in less time. But the only way you can identify that opportunity is if you know how much they’re working—information you can easily access when they fill out a timesheet.
- Identify red flags. Even though salaried employees aren’t paid by the hour, you still expect them to be there for a certain number of hours each day. Having salaried employees fill out timesheets will confirm that they’re showing up on time and working a reasonable number of hours—or, if they’re showing up late and leaving early every day, it will clue you in to what’s going on.
Make sure all your employees are filling out timesheets—salaried employees included
As a small business owner, there are certain employees (specifically, non-exempt employees) required to fill out timesheets. But if you want to get the best results for your business, you should plan on having all your employees fill out timesheets—including salaried or exempt employees.
Looking for a time tracking solution that will help you better track and manage your employee’s time? With Hourly, your employees can clock in and clock out from their mobile devices—and you can collect their signed digital timesheets from your phone.
What's more, Hourly offers workers' comp insurance and payroll services for small businesses with hourly workers. Powered by real-time data, Hourly’s platform simplifies the highly complex workers’ comp process. It syncs your payroll data directly to your workers’ comp policy so you only pay exactly what you owe on your premiums, not an estimate. Hourly's goal is lower audit risk, faster payroll runs, and better claims and safety services for small businesses everywhere. Hourly is a licensed insurance agent with products underwritten by various insurance companies.
Ready to transform your business into a profit-pumping machine? Learn how with our monthly newsletter.
