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  • Overtime
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Why You Need an Accurate Time and Attendance Process


With increased enforcement of the laws and regulations based on employee compensation for hours worked, it's more important than ever to ensure your time and attendance reporting process is keeping pace with requirements. Maintaining detailed, accurate time and attendance records can help you avoid overpaying for lost time, penalties, fines, and possible lawsuits. So, whether you track time manually, with a time clock, or through a software service, you'll want to make sure you're up to date in a few key areas.

Paid Sick Leave

The push for laws mandating paid sick leave is gaining momentum across the country. Several localities and a growing number of states have enacted these laws.

If your state or locality enforces one of these laws, be sure you understand how much time off is required, whether there are any caps on accrual, and what rollover policy is included. Having a quality time and attendance solution can help you ensure sick time is accrued and applied properly. It may also allow you to easily report this information to employees, which is required by some of the enacted laws.

Affordable Care Act Provisions

The employer shared responsibility provisions in the ACA require detailed tracking of hours worked to ensure that employers are classified correctly, full-time employees are identified, and that health coverage offers are reported appropriately.

Your status as an applicable large employer is, in general, based on whether you have 50 or more full-time employees including full-time equivalent employees, in the previous year. When you fall into this range, you may be subject to employer shared responsibility provisions. That means you may make offers of adequate and affordable health coverage to full-time employees and their dependents, as defined by the regulation, in order to avoid a potential penalty.

The provisions are based on hours worked and salary. You also have to provide detailed reporting to the IRS at the end of the year. Much of the information you need to report comes from payroll data.

Overtime Pay

Miscalculating pay based on hours worked can result in penalties under the Fair Labor Standards Act (FLSA) and/or applicable state law. For your full-time exempt employees, overtime doesn't apply. However, under the FLSA, all non-exempt employees must be paid overtime for every hour worked over 40 hours per week. If these hours aren't paid correctly, you may open yourself up to costly fines and penalties.

Having a detailed process for tracking time and managing overtime can help your business save money, help ensure your employees are paid appropriately, and help you comply with employment laws and healthcare reform. You have many choices available for tracking time and attendance, from manual solutions to services that provide you expertise and guidance. If you're even a little unsure of where your company stands on any of these issues, it may be time to review your process and get help if needed.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.