Do you know what I love? Revisiting the basics of running a business. Sometimes we get so caught up in the complicated details we forget the simple things that make a business run smoothly. Today I’m going to focus on an article from our Resource center and talk about what hours tracked means and the many ways you can do so.
The Fair Labor Standards Act defines hours worked as any amount of time an employee is doing their job requirement. This includes working remotely or being on-site. They must be paid at least the federal minimum wage for all hours worked, not including meals. How many hours will depend on whether that employee is full-time, part-time, and any overtime hours.
Choose a recording method.
- This could be manual timesheets like a piece of paper or excel document. You can also find a time tracking software or the good old time clock (stamp time).
Set a start and end time.
- Make a schedule if your employee’s hours differ from day-to-day, or go over your expectations for hours worked.
Set a rounding policy.
- According to the Fair Labor Standards Act, employers can round up time worked by employees. This also makes calculating those hours much easier.
Convert time to military time.
- This may be a little confusing for some, but one perk of military time is that there is no a.m./p.m. This can make tracking easier since you don’t need to worry about differentiating the time of day.
Convert minutes to decimal.
- You can do this by dividing the number of minutes by 60. If someone worked 7 hours and 30 minutes, you would take 30 divided by 60 and get .5, for a total of 7.5 hours. This will simplify your life immensely so that adding time tracked over the week is smooth and consistent.
Subtract start time from the end time.
- If you followed steps 4 and 5, you’ve set yourself up for a simple calculation. Here’s the example from the article: Let’s say an employee clocked in at 8:30 AM and clocked out at 5:30 PM, or 8:30 and 17:30. When you convert the minutes to decimals, you’ll get 8.50 and 17.50. Then, you’ll subtract: 17.50 – 8.50 = 9
Subtract unpaid time for breaks.
- You want to pay your employees only for the time they worked (billable hours) so remove any unpaid time like breaks from their total time.
Keep track of weekly hours.
- Now you need to keep a record of these hours, and all the steps above make this step easier. There are many free or inexpensive ways to do this, but having copies of these hours will not only be important for payroll but for any time discrepancies that come up.
Wait, it’s not over! Head over to this link for the full article and more inside into time tracking:
How to calculate hours worked.
