Employee Attendance Tracking: Best Practices for Compliance & Productivity

If your organization has a large pool of hourly workers, accurate attendance management can be a huge undertaking. But failing to come up with a solution that works for both your HR team and your workers can have a heavy impact on your company.

Manual errors are common, resulting in over- or underpayment: Payroll costs are off by as much as 20%, costing employers $381 on average for each inaccuracy. Poor time-tracking often leads to compliance risks for businesses: Between 2021 and 2023, U.S. companies paid $1.5 billion in wage and hour settlements, largely due to inaccurate time-keeping.

On the flip side, businesses lose $373 million a year from “buddy-punching,” in which another employee clocks in for an absent worker. And “time theft,” in which employees clock in for hours they haven’t actually worked, results in payroll losses equivalent to 4.5 hours per employee per week.

For the sake of both your workers’ wellbeing and your business’ bottom line, it’s important to put a streamlined, accurate solution in place for managing attendance across all of your business’ locations and field operations.

Looking for the best ways to track employee attendance? In this guide, we’ll cover best practices, compliance strategies, and tools for effective attendance tracking.

Why Employee Attendance Tracking is Essential

The Role of Attendance Tracking in Workplace Productivity

Accurate attendance management is crucial for ensuring employees’ accountability, and makes it easier for employers to address issues around absenteeism.

When workers know that their attendance on the job site is being verified, they’re less likely to engage in time theft, either on their own behalf or their colleagues (in the form of buddy-punching). Given the consequences of being caught abusing the system, they’re far more likely to report their labor time accurately, increasing your workplace productivity.

They’ll also be able to see their attendance data, and get an instant look at how many absences they’ve racked up and how many more days of leave they can take before facing negative consequences, such as job termination. As such, they’ll be less likely to call out for unnecessary reasons: By putting TeamSense’s absence management solution in place, Kenco was able to reduce their absentee rate by 39%.

By building transparency into your attendance management system, you’ll also be able to boost employee morale. Employees will gain more trust in your business when they can track their attendance on a dashboard and ensure that they’re being paid accurately for the time they worked, and that your leave management policies are being enforced consistently based on accurate data. As a result, they’ll be more productive on the job, and less likely to leave for another role.

Compliance and Legal Requirements for Attendance Tracking

Beyond the benefits to the employee-employer relationship, an accurate attendance tracking system is critical for ensuring compliance with industry regulations and labor laws.

The Fair Labor Standards Act (FLSA) mandates that employers keep accurate records of hours worked by non-exempt (hourly) employees, including the time the work starts and ends, as well as break periods. Failing to comply with FLSA can result in significant monetary fines, including the requirement of paying double the amount of back pay owed for workers who were not paid for time worked, as well as civil penalties of up to $2,374 per violation. Employers may also face criminal charges of up to $10,000 per incident. Last year in Pittsburgh, for instance, a Pennsylvania federal court awarded $35.8 million in back pay and damages to a group of nursing home workers who’d been denied overtime pay.

The Family and Medical Leave Act also mandates proper tracking of employee leave for eligible employees. And some states, including New York and California, have even stricter requirements around wages and hours than federal requirements.

To protect your business from running afoul of compliance regulations, it’s important to embrace employee time tracking solutions that accurately track both regular hours and overtime to ensure that employees are being paid fairly. By doing so, you’ll be able to minimize your business’ legal and compliance risks, helping your organization avoid the chance of financial and reputational damages.

Best Practices for Employee Attendance Tracking

So now you know why a solid employee attendance tracking system is so crucial—but how do you monitor employee attendance consistently across all your locations? It’s a combination of clear policies and the right technology.

Establish a Clear Attendance Policy

Make sure your attendance policy leaves no room for confusion. Define rules for managing lateness, absences, and paid/unpaid leave, with clear consequences (or “points”) for excessive absenteeism, lateness, and other disciplinary issues.

Ensure that all employees have access to your policy documents, whether through a printed handbook or a digital link. If some of your workers aren’t native English speakers, it’s also important to provide translated versions of the policy manual in their preferred languages.

Use the Right Attendance Tracking Method

Spreadsheets and basic time clocks don’t cut it anymore when it comes to managing attendance. Today’s employers can use an advanced array of employee time tracking tools to accurately track attendance and eliminate the risk of wage theft due to inaccurate timekeeping or buddy-punching.

For teams that work at the same location each day, biometric attendance tracking systems are an ideal substitute for time clocks, using biometric data to accurately authenticate employees when signing in or out. Each new employee’s biological traits (such as fingerprints, facial features, and/or irises) are scanned into the system during onboarding, so that each time they sign in or out, the system will instantly recognize them and log their time. Such solutions may be expensive to implement initially, but are highly accurate and can prevent wage-related fraud.

But what if employees work out in the field, and may change their location frequently? In these cases, GPS and remote attendance tracking tools are ideal for your needs. Typically, employees log in via a mobile app or a GPS device, and the app records the timestamp and geolocation to confirm their presence at the worksite. Employers will be able to view each employee’s location in real-time as they are working, and can see when a team member has moved from one location to another or has logged off.

Both types of solutions are set up to automatically sync with payroll and HRIS systems, ensuring streamlined attendance management and verifying that employees will be paid accurately for their time. 

Improving Accuracy Around Absence Management

These types of solutions are great for when employees show up to work—but what about when they need to call off? Phone trees are inefficient, and may leave site supervisors struggling to manage operations if they haven’t received timely notice about employee absences.

In these cases, our absence management system, TeamSense, offers a streamlined and efficient solution for notifying both HR teams and managers about call-outs, ensuring they receive absentee data instantly. Employees can simply log their absence and its associated reason on a text-based app, and get visibility on how many sick/personal days they have remaining.

Site supervisors can instantly see how many employees will be absent on a given day, so that they can easily revise schedules and call in other workers if needed to ensure productivity remains high.

Yanfeng, an automotive parts supplier that switched from call center-based absence reporting to TeamSense’s text-based absence tracking platform, says the automated solution has made it far easier for their managers to adapt production schedules based on absences. “If supervisors know that five of their team members are going to be off before the shift starts, they can plan appropriately,” says Devin Frosheiser, procurement manager. “They can request overtime, call another teammate to come in early, or swap employees from another division on the floor. The ability to staff has really improved with TeamSense.”

For HR, the absence data is instantly fed to your payroll system, ensuring accurate pay and fair enforcement of leave policies. Fosheiser says that adopting the absence management tool has enhanced the employee experience for the HR team: “Instead of having to spend an excessive amount of time focused on data entry for call-offs—which is a very reactive process—they now can be proactive and focus on engagement.”

Compliance Strategies for Attendance Tracking

To avoid the risk of penalties and lawsuits, it’s important that you set up a compliant system for labor law compliance and attendance tracking. These tips can help.

Ensuring Accurate Record-Keeping

Under the FLSA, businesses are required to maintain time-keeping records for all employees, including hours worked, pay rates, and overtime, for a minimum period of three years. However, it’s also important to check your state’s requirements, as some state laws are more stringent: New York requires companies to retain records for six years.

Addressing Privacy Concerns with Attendance Tracking

When monitoring employee locations or using biometric data for attendance taking, it’s important to make sure that you’re protecting your employees’ privacy and using the information you’ve collected ethically. Some locations require consent prior to collecting biometric data, and may require transparency around monitoring employees’ activities. Before implementing these technologies, ensure that your company’s legal team signs off on their use and provides guidance around putting them into practice.

Preventing Attendance Fraud & Time Theft

Integrating best-in-class attendance management technology can help you greatly reduce the amount of time fraud that occurs in your business. Even so, it’s important to regularly review your attendance logs for potential discrepancies, and identify potential issues with compliance. You can use AI-based tools to help you spotlight trends such as patterns in absenteeism or inconsistencies with payroll, and conduct a manual review to determine the right course of action.

Improving Productivity Through Attendance Management

Enhancing your attendance management strategy can improve employee productivity and help your operations team enhance efficiency. By reducing absenteeism and curbing time fraud, your teams will be able to increase output without increasing costs.

How Attendance Data Helps Workforce Planning

By using an absence management platform like TeamSense, you’ll be able to analyze trends in absences and their reasons, and use that data to help optimize scheduling and workload distribution. You’ll also be able to identify when certain illnesses are spreading among your workforce, and put preventative measures in place to reduce the risk of contamination.

With access to insights about which workers are calling out and why, you’ll be able to put strategies in place to improve your retention and keep employees healthy and happy on the job.

Reducing Absenteeism and Improving Employee Engagement

Ensuring accurate, authenticated time-keeping can help your business reduce absenteeism and improve punctuality. Ensuring each arrival, break, and dismissal is time-stamped and matched to an employee’s verified ID will eliminate the risks of time theft and buddy-punching, and will help employees stay accountable for sticking to their schedules. By using TeamSense’s absence management solution, employees will be able to see their attendance data and understand when an absence could put them at risk of repercussions, making them less likely to take unplanned leave.

These solutions make it easier to track employee performance, resulting in higher workplace productivity. And when everyone’s pulling their weight, team morale improves: You’ll likely see more positive interactions and attitudes at the workplace as a result.

Role of AI & Automation in Attendance Tracking

Incorporating AI and automation tools into attendance tracking gives you insights to improve attendance monitoring. Automated attendance management technology can give you real-time insights into your hourly workers’ attendance, and help you capture trends around absences including illnesses and weather-related emergencies. You’ll be able to use predictive analytics to identify times of the year when workers are more likely to call off, and make data-based hiring decisions to supplement your existing workforce accordingly.

By embracing the power of AI to help you manage and track attendance, you’ll be equipped with insights that can help you optimize your workforce for maximum productivity.

Choosing the Right Attendance Tracking System

Choosing the right attendance tracking solution will largely depend on your business needs.

Are your workers based in the field at scattered locations, or do they all clock in at centralized warehouses to start their shifts? Do you want a standalone attendance solution, or to choose an all-in-one HR platform that includes attendance management as a product?

Once you’ve identified your key goals for a solution, evaluate how well each contender meets your requirements. Does it have the functionality you require, and integrate with your existing technology stack? Will the solution be easy for your team to implement?

Keep in mind that for frontline workers, more sophisticated technology isn’t always a plus. Many workers are reluctant to download apps onto their personal devices, and may prefer a simple, text-based app like TeamSense. By meeting your employees where they are, you’ll be able to drive higher adoption rates and ensure that the technology is used productively.

Comparing Popular Attendance Tracking Solutions

Some of the most commonly used attendance tracking tools include:

• Clockify
  This free timekeeping tool is available via web app, phone app, and desktop timesheet. HR teams can export reports to sync with payroll data. This app lacks biometric features and many of the integrations of larger platforms, but may be a good start for budget-conscious small businesses.

• BambooHR
  BambooHR is a multi-featured HR app that includes time tracking alongside many other HR functions. Employees can use the mobile app to clock in, activating geolocation, so that you can track where they perform their work each day. Employees can also submit time-off requests for instant HR approval.

• ADP Workforce Now
  This HR solution offers built in biometrics tracking for time keeping, and can verify employee IDs when clocking in or out, eliminating the risk of buddy-punching. ADP offers many other workforce management tasks in its suite and is priced accordingly, but can be a great fit for larger businesses that can justify the investment.

• QuickBooks Time
  If you’re a QuickBooks customer, this time-keeping solution will integrate seamlessly with your payroll and accounting reports. Employees can use a tablet to clock in, with a geofence that reminds them to sign in or out between job sites.

• TeamSense
  Our absence management tool focuses on tracking absences, rather than attendance. When an employee can’t make it to work, they can notify multiple divisions of the company at once through a seamless, text-based app, saving time on notifications and providing enhanced transparency around company absences.
  

Conclusion

With the right tools for attendance management at hand, your business will be well on its way to increased workforce productivity, reduced absenteeism, and lower compliance risks.

Discover the difference a real-time absence tracking system can make to your attendance management program: Get a demo of TeamSense today.