Timekeeping might seem like a straightforward task: track when employees clock in and out, process payroll, and move on. But in reality, it’s one of the most scrutinized areas of employment law compliance. With wage-and-hour violations on the rise and enforcement tightening across the country, even honest mistakes can lead to audits, fines, or worse.
In this blog, we’ll break down:
Let’s start with the basics: what exactly are you required to track, and what’s really at stake when you get it wrong?
If you’re running a business, you're already subject to a tangled web of employment law compliance. Ignore it, and you’re gambling with audits, lawsuits, and fines. The good news? Most of it boils down to keeping clean, consistent records and respecting your employees’ time.
Here’s the short list of heavy hitters in the employment law compliance arena:
It's crucial to remember that state laws can impose stricter standards than federal ones, making it essential to be aware of the regulations specific to each state where your business operates.
You’re required to keep detailed time records for non-exempt employees — aka, anyone eligible for overtime. This means tracking:
These consequences of employment law compliance aren’t just hypothetical. Violations can result in significant financial penalties. For instance, in the 2024 fiscal year, the Department of Labor recovered over $273 million in back wages due to FLSA violations, with overtime violations accounting for the majority of them.
To illustrate the gravity of employment law violations, consider these recent cases:
In April 2024, a jury in Seattle awarded nearly $100 million in damages to employees of a prominent hospital. The hospital system was found to have violated state employment laws by rounding time clocks and failing to provide required second meal periods for shifts exceeding ten hours.
A security company in Indiana faced its third violation since 2018 for failing to pay guards overtime at time and a half for hours worked over 40 in a workweek. In January 2024, the U.S. Department of Labor assessed the company $27,597 in civil money penalties and recovered $28,334 in back wages and damages for 31 workers.
In December 2024, a restaurant in Napa was fined $45,570 for child labor violations, including allowing minors as young as 14 to work outside permitted hours and operate hazardous equipment.
Beyond financial repercussions, non-compliance can damage employee morale and your company's reputation. Ensuring accurate timekeeping also means fostering a fair and transparent workplace.
Timekeeping tech has come a long way from spreadsheets and dusty punch cards. Today’s systems are built with compliance in mind, helping employers proactively address the kinds of wage-and-hour violations that trigger audits, lawsuits, and costly fines. These tools flag risk, surface anomalies, and generate audit-ready data with very little manual effort.
When you’re shopping for timekeeping tools, prioritize those with:
When your time tracking software talks directly to your payroll system, there’s no need to manually input hours worked. That reduces the risk of rounding errors, data entry mistakes, and late payments.
If the software doesn’t integrate with your payroll system, ensure employee hours can be quickly uploaded to payroll via a timekeeping software report. This is also important in case of tech outages.
Either way, you should never have to manually input hours into payroll - no one has time for that.
In states that mandate meal and rest breaks, modern systems log these automatically and even send alerts to managers when employees miss a required break or approach overtime.
Want to stop off-site clock-ins or buddy-punching? Tools like facial recognition, fingerprint scanning, and geo-fenced locations ensure only the right employee clocks in at the right place and time.
By assigning hours to specific tasks or job sites, employers get granular insight into labor costs and a more defensible position when it comes to classification audits or wage disputes.
Mistakes happen, but every correction should be documented. With built-in audit trails, you can adjust records when needed without compromising data integrity or legal defensibility.
Keep in Mind: Regulators don’t just care about what you paid. They want to know how you tracked, calculated, and justified it.
The right timekeeping platform helps you avoid noncompliance before it becomes a problem. And in a landscape where wage laws vary wildly by state and shift constantly, that kind of prevention is a major competitive advantage.
Even the best timekeeping software has limits. It’s a tool, not a legal advisor, not a compliance officer, and definitely not a replacement for sound judgment.
While timekeeping platforms automate essential functions, they can’t tell you if you’re adhering to employment law compliance correctly. For example:
That’s where expert guidance comes in.
When paired with experienced support, your timekeeping tech becomes part of a larger compliance strategy. A strategy that’s proactive, defensible, and tailored to your business. The goal isn’t just using your system. It’s using it well, with the right people in your corner.
Running a compliant business means building systems that are accurate, defensible, and adaptable. We’ve covered the key employment laws that govern timekeeping, the role of technology in mitigating risk, and the human expertise required to fill in the gaps software can’t cover.
At BBSI, we support our clients with more than just tools. We provide tailored guidance to help you navigate complex employment laws, audit-proof your practices, and stay aligned as rules evolve.
If you’re unsure whether your current setup is truly compliant or if you have specific questions that this blog didn’t address, please reach out to your local BBSI Business Partner. We’re here to help you stay ahead, not just keep up.