The value of time tracking for salaried employees

From increased productivity to better job costing, salaried employees and their employers can benefit from time tracking practices

When it comes to tracking workers' time, no one questions why it’s important for hourly employees to clock in and out. Employers need time cards to run payroll, calculate job costing, and keep track of overtime. Employees need time cards to get paid for all the time they put in and to support their requests for raises or bonuses. Perhaps that’s why many employers already ask all their employees, including those who are salaried, to track their time—71%, according to our latest poll.1

Why do employers ask salaried employees to track time?

  • 55% said they do it for payroll.
  • 49% said they do it for time management.
  • 31% said they do it to track performance.

But what’s in it for salaried employees? In QuickBooks Time’ latest entry in The Ultimate Guide to Employee Time Tracking, we explore the benefits of time tracking for salaried employees.

4 reasons salaried employees should track time

Running payroll for hourly employees gives business owners a certain amount of insight into how their workers are doing. For instance, a manager might notice when workers are slammed, based on when employees clock the most overtime. Or based on how much time workers spend on a certain project, a business owner can know how long future projects are expected to take.

But running payroll for salaried employees who don’t track their time is a bit like asking a business owner to close their eyes and blindly hand over a check. Employers can’t know for sure how many hours employees are working, or where those hours are going. No wonder 36% of the employers surveyed said they "sometimes" or "always" have difficulty tracking salaried workers’ projects.

1. Time tracking is good for productivity.

Not everyone needs a timer to help them stay focused on the job at hand, but some people thrive on structured time tracking. This potential for increased productivity is one great reason salaried workers should clock in. As software development firm Atomic Object reveals, tracking time is an essential part of staying focused and managing priorities. "Tracking time at the team level is important to make sure projects stay on track with a predictable level of effort," says Shawn Crowley, a writer for the company’s "Great Not Big" blog." [Employees] track and review their individual time to help balance their billable time with other activities like blogging, community events, or hiring."

2. Job costing applies to all employees.

When most employers think about job costing, hourly employees are top of mind. An employee earns $20 an hour and spends two hours at Job Site A, using $100 in materials to perform X service. But how much is the employer spending on that job, including employee time, gas, and materials, as opposed to how much the customer is getting billed for that service?

Job costing isn’t just applicable to hourly employees. Knowing how much a job should be billed, even when the employee working on it is salaried is equally relevant. "Job costing compares your revenues to expenses," says Jake Albers, a QuickBooks Time customer success team leader. "It gives you a breakdown of how much [the employee is] earning and how many hours they’re spending on a job or project, and then it generates an estimated cost."

More than half of the employers we surveyed said they "sometimes" or "always" have a problem with salaried employees not fulfilling their job requirements.

3. Time tracking keeps everyone honest.

If you knew someone was looking at your time card, would you be more or less likely to report your hours honestly? For most people, time tracking is simply that: a tool for keeping everyone honest.

More than half of the employers we surveyed said they "sometimes" or "always" have a problem with salaried employees not fulfilling their job requirements. But what if the salaried employee says it’s not their fault? They say they’re putting in 60 hours a week, but their workload is just too big to get it all done on time. Their manager says that’s not the case.

The best way to find out the truth? Time tracking. If an employee is right, their manager can give them the resources they need to start working 40 hours, instead of 60. If the employee is wrong, their manager has what they need to make an informed decision about their performance.

4. FLSA violations are expensive.

Every year, companies pay out millions of dollars for violating Fair Labor Standards Act (FLSA) regulations. Intentional or not, many are in violation for failing to pay their nonexempt, salaried employees overtime or even the required minimum wage. These are acts of wage theft.

37% of employers surveyed admitted their nonexempt salaried employees “sometimes” or “always” work unauthorized overtime. They also said their salaried employees were more likely to work over 40 hours than under.

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Nonexempt salaried employees are tricky. To be classified as nonexempt, a salaried worker has to make less than $23,660 a year. Such nonexempt salaried employees qualify for overtime, which some employers don’t know.

When asked, 37% of employers surveyed admitted their nonexempt salaried employees "sometimes" or "always" work unauthorized overtime. They also said their salaried employees were more likely to work over 40 hours than under.

But authorized or not, these employees must receive overtime pay, and when broken down to an hourly rate, what they make per hour must be more than the minimum wage. Should a worker claim they're not being paid correctly, employers have to be able to show two years' worth of records that support otherwise. Time cards may be everyone’s best line of defense, both in prevention and proof, when it comes to an FLSA lawsuit.

3 reasons tracking time is in an employee’s best interest

While employers might be on board for tracking salaried employees’ time, employees should also understand the value of punching in and out. Here’s why tracking time is in an employee’s best interest as well.

1. Employees can hold employers accountable for unrealistic work expectations.

This door swings both ways. Just as employers can use timesheets to prove workers aren’t being mistreated, employees can use them to prove their own need for more resources, additional headcount, or more flexible hours.

For example, many salaried employees are often expected to be at work during normal business hours and be available on weekends or in the evenings—particularly those with international ties. Salaried employees looking for more flexibility, or simply better understanding, can use their time cards to prove a point.

2. By tracking time and projects, employees can take charge of their reviews.

Whether a company evaluates raises on a quarterly or annual basis, the main challenge for employees requesting a bump in pay is justifying why they deserve an increase. With the proof of a thoroughly filled-out and accurate timesheet on their side, salaried employees will find it easier to convince managers the work they do and the time they put in deserves a raise.

3. Advanced time tracking features keep employees organized and protected.

Using a time tracking or other time management solution that allows employers to create classes, service items, tasks, and more can help employees stay organized.

Noting which clients or projects salaried employees are working with or working on serves multiple purposes. Should a client refute their bill and argue an employee did not spend as much time on a project as they billed, it’s easy to check the employee’s time log for that client and get everyone on the same page.

Everyone benefits when salaried employees track time

When all employees, hourly and salaried, track their time, everyone benefits. Employers get insight into when their salaried employees are working and how their hours affect clients and the company’s bottom line. Its important that employers have use a consistent timesheet template or software that can accurately track time. Salaried employees have the data and records they need to back up their requests and ensure they’re paid their full value.