Automatic clock outs

Sometimes we get asked if our system automatically clocks hourly employees out at the end of a shift.

The quick answer is no.

Sure, such a feature would make it easier for employees since they wouldn't have to remember to clock out.

And yes, such a feature would make it easier for you by managing potential overtime, or keeping hours consistent.

But there is a downside.

It's not because we couldn't build such a feature. It's because features like that could get the employer in trouble.

Similar to rounding rules, start zones, and auto lunch deductions, automatic clock outs don't know if an employee is still working or not.

And because of that, it could work against them.

That's where the rub is.

Consider it better, safer, and more fair to employees not to manage them using time clock software. Instead keep it simple, start paying them when they clock in, and stop paying them when they clock out.

If they forget to clock out once and awhile, no problem.

It's easy for you to make adjustments.

Why software changes

Change is hard.

Has this happened to you? You spend weeks using and learning software, only to have them make major changes to it? To the point of wondering if you made a mistake?

Or maybe you bought a new laptop a year ago, and now it's asking you to load a new operating system. Do you jump on it? Or wait?

And what about AI? Do you worry about falling behind by not using it? Because everyone says you will fall behind?

Software changes because technology changes, but we shouldn't stress about it.

Consider avoiding the hype. Instead, stick to solutions that are simple to use and easy to understand. More importantly something you can rely on to get the job done.

We learned this lesson several years ago...

After making some major changes to an earlier version of Webtimeclock, we got major pushback from customers. People did not appreciate all the changes, even when they were designed to make things better. So, from that moment on, we said never again, unless the changes are minor.

That's why Webtimeclock releases a new version every few years, instead of disrupting the software you rely on every day.

We want Webtimeclock to be the best tool for teams with mostly hourly employees.

To do that, we take it one version at a time.

Introducing Webtimeclock 5

Our latest version has been released and seems well received so far.

One of the biggest changes from Webtimeclock 4 is keeping the employee list and admin list separate. That made Webtimeclock 4 a little confusing, and a little unfair, since it bills for admins too.

Another big change is how we bill. You no longer have to archive an employee to avoid billing. Our system is intelligent enough to know if an employee is active or not. If they don't track time, we don't bill for them.

Here are a few highlights...

Time Tracking

• One central login for employees and admins
• Employees log in with an email address and password
• Clock options include web, phone, kiosks, and wall-mounted time clocks
• Phone GPS tracking or phone lockout
• Job tracking
• Auto lunch deduction
• Shift rules
• Exceptions such as in-late, out-early can show in red on timecard
• Much improved time reporting that covers any date range

HR

• PTO/Vacation tracking and accrual
• Sick time tracking and accrual
• Employees request time off
• Employees see their schedule
• Employees see their PTO/Sick balances
• Employees can approve and comment on their timecard.
• Record employee hire, birth, seniority, and exit dates
• Record employee residence address

Payroll

• ACH direct deposit payments to employees
• Tax deposits to tax authorities
• Unlimited payrolls per month
• Employee benefits
• Employee post-tax deductions
• All 50 US states

Knowing everything

It is impossible to know everything.

I remember a professor saying the most important benefit of getting a degree is not the knowledge. It's knowing how to find the answers.

Working in HR, managing an office, or running a business are perfect examples.

At some point you will be asked a question you can't answer.

It is perfectly natural, and has nothing to do with your qualifications. It simply means you want to be sure to get it right.

Here is an encouraging thread on Reddit.

The top ten list

According to whom?

If we write a top ten list, it has real value. It may be the top 10 things we need to do today, our top 10 goals, or the top 10 items to pick up from the store.

But if someone else writes a top 10 list, is there real value? For the author yes, but for us? Not necessarily.

In our niche we see things like the top 10 time clocks, or the top 10 payroll companies. Which are fine, but how did the authors determine that? And why are their products always number one?

Listicles (half list, half article) was, and maybe still is, an easier way to get noticed by search engines.

Thankfully however, people are starting to catch on to this. Even search engines are putting more emphasis on more factual results.

Because something is on someone's list does not mean it is better. That is, until we add it to our own list.

What are we paying for?

Most of us understand what we pay for. Things like rent, phone, and utilities.

But when it comes to tax deductions on paychecks, many of us have no clue.

To put it mildly, calculating payroll taxes is complicated in the US, and has been for many years.

We already know deductions are based on a combination of things, for example where you work, what you do, how much you make, what you claim on your W-4, and more.

But how do those numbers get calculated exactly?

You could pull out tax tables to see how the amounts happen, but more than likely you are using payroll software that handles this for you.

So, what do you do if an employee asks?

One suggestion is to explain the various deductions shown as acronyms on their pay stub... and why they are collected. Things like FICA, Social Security, and Medicare. Explain the difference between gross pay and net pay. Explain it is possible to be eligible for a refund in April. And explain how you as the employer pay payroll taxes too.

We can't change the US Payroll Tax system, but we are in a sense obligated to explain it to our employees.

They may or may not like it, but at least they will know what they are paying for.

You don't need time clock rounding

Like most time clock software systems, Webtimeclock includes rounding rules.

For example, you could round each punch to the nearest quarter hour, or tenth of an hour, instead of the exact minute.

Which, by the way, is still legal providing the rules are neutral and do not favor either the employer or the employee.

However, if they favor the employer, you could get fined like this unfortunate company in Florida who paid $594,313.00 for back wages and damages.

Specifically, its rounding methods improperly reduced hours that resulted in unpaid overtime for hours worked over 40 per workweek.

Even with that, we won't say you shouldn't use time clock rounding.

But... you really don't need it any more.

Here are a few common myths...

Simplifies payroll processing

No, rounding rules do not simply payroll processing. Since time clock software calculates to the exact minute, there is no additional value or simplification.

The only exception is when you calculate hours manually... Hopefully you don't do that any more. Too much time, and too many errors.

Reduces administrative burden

No, rounding rules do not reduce administrative burden. When an employee misses a punch, enter the exact time it should be... done.

Manages overtime

No, time clock rounding does not manage overtime. Managers manage overtime. Consider supervising employees when they try to take advantage, and offer an employee handbook with rules to set expectations.

Consistency and efficiency

No, rounding does not help consistency or make things more efficient. If you want consistency, don't use a time clock.

As a wrap...

By law, employees should be paid for every minute they work. Wouldn't it make things better if we did?

Watch the payroll calendar

Yesterday a payroll customer noticed they were late submitting payroll.

For context, it was Wednesday with payday on Friday. Along with the fact they were approved for two-day processing.

What happened?

Turns out Thursday was a National holiday, meaning the ACH system was not operating. Holidays are treated like any Saturday or Sunday.

So instead of two-day processing, this customer needed next-day processing to make it work. Which we did.

For those of us who run payroll, it's good to watch the calendar.

Happy Juneteenth!

Miss a payroll deadline?

With Webtimeclock, every new payroll account gets a three-day processing period, which can be upgraded to two-day at any time.

Why three business days?

It's really about the ACH system.

Three days gives plenty of time for payroll funding amounts to be debited, validated, then dispersed to each employee on payday morning.

For example, if payday is Friday, your deadline is Tuesday.

It's safer... If for some reason your funding defaults, you have time to fix it.

If you prefer two-day or next-day, you can do that too. Just know it requires proof you can fund your payrolls.

But... What if you miss a deadline?

Below are three options. If you don't use Webtimeclock, your payroll provider should offer similar ways.

Wire transfer

As long as you wire funds before 2 PM pacific the day before payday, employees will receive their pay on time.

You could wire before 2 PM on payday too, just know employees will not be paid until that evening at the earliest.

Off-cycle payroll

Instead of paying employees through ACH, you could hand out paper paychecks.

By running an off-cycle payroll, the actual payday might be a few days later, but employees could get paper checks right away. ACH will still handle your tax payments.

If employees prefer ACH, explain that they will have to wait.

Next-day payroll

If you are approved for two-day processing, you are automatically eligible for next-day payroll (at an extra cost of $2/employee).

As long as you submit payroll by 5 PM pacific the day before payday, employees will be paid on time.

Infinite interruptions

According to Microsoft, many of us experience the infinite workday... At least those who are considered knowledge workers.

Folks tend to work around the clock more than we did in the past.

It makes sense if you consider all the emails we parse through, meetings during peak hours, slack messages we send, and pesky interruptions every five minutes.

As a result, many of us work crazy hours.

But alas, that was not the purpose of the article. The point was to let us know the "Frontier Firm" powered by intelligence on tap (AI) will improve all this.

These firms are redesigning business processes around AI and agents to scale rapidly, operate with agility, and generate value faster than traditional companies.

Okay that's nice, but how?

Keep in mind working long hours is not always a bad thing. As an upside, it can help push us towards innovation, open new opportunities, and build stronger teams.

Naturally Microsoft wants to promote AI because they stand to profit from it. But will an "agent boss" save us from infinite interruptions? Or will it simply create more?

Time clock software. A guide for small business.

Time clocks and time clock software have changed over the years, but the need to track employee hours for payroll remains the same.

If your company runs payroll, it might be good to understand what is currently available and what the benefits are. It is possible to save time, lower expenses, and reduce mistakes, just by switching to a time clock software provider.

In this guide we aim to help anyone who handles payroll hours, whether an experienced pro, or new to the task. We won't focus on Webtimeclock, just an overview of what is generally available.

Here is what we cover:

• What is time clock software?
• A brief history of time clock software
• Who uses time clock software?
• What does time clock software do?
• Why is time clock software important to business?
• How much does time clock software cost?

What is time clock software?

Time clock software is an application used for tracking employee hours for payroll. Its purpose is to automate tasks that used to be handled manually, such as time tracking hours, calculating overtime, and scheduling work hours. It provides everything you need to ensure work hours are correct before running payroll.

Generally, time clock software includes features to help collect employee punches, provide time card and timesheet reports, allow you to edit time when necessary, and finally report total work hours to your payroll system.

Consider it a tool that helps get your job done, it provides a combination of an employee time clock, along with automation features that handle your reporting. Once you become familiar with the software, payroll processing will be easier, more productive, with less mistakes.

A brief history of time clock software

Time clock machines were invented many years ago as a way to record time records of employees, however for payroll, the process required manual effort. It wasn't until the introduction of personal computers in the 1970s that manual entry started to be reduced.

Later, spreadsheets provided a way to track time and calculate hours, followed by shrink-wrapped, Windows-based time clock software in the 1990s. Although there are still vendors that offer Windows-based time clock software, for the most part, they are no longer in active development.

Now with the internet, and more advanced technology, time clock software is provided as web-based (aka cloud-based) services. The advantage is allowing employees to clock time from anywhere with an internet connection along with real-time hours reporting.

Modern solutions also offer more advanced features with clocking options such as biometric fingerprint or facial recognition, web-based kiosk apps, and clocking in/out from any mobile phone or tablet. Those features, in combination with modern software interfaces and reporting, have greatly improved the process and reliability of employee time tracking.

Who uses time clock software?

There are a variety of people who use time clock software. It could be a business owner, an advisor such as a CPA or bookkeeper, an office manager, an HR director, or anyone tasked specifically as a payroll specialist or clerk. It can also be someone who simply manages employee hours while someone else runs payroll.

Whatever your role, it is important to understand how to handle time tracking, as payroll and time tracking are tightly linked together. Payroll, in most cases, is about turning time into employee paychecks, for both hourly and salary employees.

Every situation is different, but in a nutshell, time tracking software can be used by anyone wanting to: run payroll, stay compliant to labor laws, avoid costly mistakes, save time, and lower business expenses.

What does time clock software do?

Time clock software handles your employee time tracking, and reports it for payroll. Here are several specific features that may be included.

Web clocking

Most providers typically offer the ability for employees to clock in/out from a web browser. This can be convenient for office employees who use desktop computers or laptops. Employees simply log in to clock time.

Kiosk app clocking

Some offer kiosk apps for employees to clock in/out. This allows you to have a centralized location for employees to clock from. For example, you can dedicate an android tablet or desktop computer as a time clock station. Some kiosk apps are web-based, while some require a download from an app store for their time clock app.

Phone clocking

Some allow employees to clock from a phone, which is very convenient for any employee who has a personal phone. This can also be convenient for companies with remote field workers that could benefit from GPS tracking. As with kiosk apps, some are offered as web-based, while some require a mobile app download from an app store.

Time clocks

Some, not most, offer the ability to use web-connected employee time clock hardware such as fingerprint, facial-recognition, RFID badge swipe, or PIN entry time clocks. These can be a convenient way to provide a time clock station without dedicating a tablet or computer. In addition, the optional biometric features will prevent time theft from buddy punching. Further, time clock hardware offers the ability to collect employee punch data even if you lose internet connection.

Multiple locations

Since providers are web-based, and depending on the provider, there should not be any limitation on the number of locations. This makes it possible for businesses to manage multiple locations from one account.

Multiple administrators

All providers include the option of multiple administrators. This is also an improvement from Windows-based software of the past. Any extra costs depend on your chosen provider.

Time card editing

All providers allow you to edit employee work hours. This is essential for administrators and supervisors to make corrections, adjustments, or adding PTO hours to an employee's timesheet.

Time card editing by employees

Some providers have the ability for employees to edit their time. This is a convenient feature for exempt employees and contractors, or anyone that does not need to clock in/out.

Calculations

Most providers, at least paid versions, provide a way to calculate regular hours and overtime hours based on the employee's in/out punches. Depending on the system, there are several tools that can help even further such as custom overtime rules, punch rounding, auto lunch deduction, paid breaks, employee scheduling, and assigned shift rules.

Scheduling

Most providers include employee scheduling. It can serve in two ways, first by letting the employee know when they start work each day, and second by defining shift rules that can help control excessive hours and overtime.

Pay periods

Most clock systems provide a way to match your payroll pay periods such as weekly, bi-weekly, semi-monthly, or monthly. This feature will allow you to run reports for timesheets, time cards, and summaries based on your pay period date ranges.

Security

Some offer ways to limit employee location if they clock in/out from the web. This feature will help ensure employees are clocking from authorized work locations.

PTO accruals

Some providers include a way to keep a bank of paid time off (PTO) hours for each employee. Since PTO hours are typically tracked on timesheets and time cards, having time clock software handle the accruals is very convenient.

PTO requests

Some, not most, offer the ability for employees to formally request time off using a web browser. This feature can be a time saver for anyone who handles HR for your company.

Paid holiday hours

Some providers include a way to manage paid holidays. Typically this allows you to enter holiday hours for all eligible employees at one time, rather than entering them individually.

Departments

Some providers include a way to manage lists of employees based on departments. This feature allows an easy way to manage groups of employees and separate them for payroll processing.

Projects and jobs

Some providers include job costing. Employees can be given the option to select jobs (or department) as the clock in for work. This, in turn, helps track both payroll hours and job hours on one time card or timesheet.

Payroll exports

Some providers include exports formatted for specific payroll providers. Depending on who your payroll provider is, they may allow you to import time data via CSV or tab delimited files.

QuickBooks Online integration

Some, not most, include direct integration with QuickBooks Online accounting. Instead of importing QuickBooks time, your work hours can be transferred without using export files.

Why is time clock software important to business?

Here are three reasons:

1. Time records are required by law
   
2. Time records determine employee earnings
   
3. Time records help control costs

1. Time records are required by law

The US government established laws through what is known as The Fair Labor Standards Act, or FLSA. It is not new, as it was signed into law by President Franklin D. Roosevelt on June 25, 1938 and became effective on October 24th of the same year. In a nutshell it establishes minimum wage, overtime pay, tipped employees, hours worked, recordkeeping, and child labor.

In regards to the recordkeeping mandate, the FLSA requires several items to keep record of, but for the purpose of time tracking, the following records are the most important.

• Time and day of week the employee's workweek begins
• Hours worked each day
• Total hour worked each workweek

The first item establishes the basis of weekly overtime calculations, the second item determines the basis of any daily overtime, and the third item determines the basis of any weekly overtime.

When keeping records, federal law requires all records on which wage computations are based should be retained for two years such as time cards, timesheets, piecework tickets, wage rate tables, work schedules, and additions or deductions from wages. These records must be made available to a federal auditor if requested.

The FLSA allows you to choose any method you wish, for example a time clock, or handwritten timesheets. In other words, it doesn't matter to them as long as your time records are complete and accurate. You are not required to use time clock software, it is just a way to keep you compliant.

2. Time records determine employee earnings

For the most part, payroll earnings are based on the number of hours worked multiplied by an employee's base rate. So the more accurate your time tracking is, the more accurate your payroll will be. Further, some systems will automatically calculate gross wages including overtime pay.

3. Time records help control costs

Principles of accounting include the ability to forecast the future based on historical performance. By knowing the number of hours worked during a season, it is possible to plan and budget labor for the future. Additionally, records can be used to discover issues that need improvement, such as noticing excessive overtime expenditures, etc.

Like accounting software, time clock software can provide insight into your historical labor usage and expenses. The deeper your records, the deeper your insight. Share them with your accountant, it may help you make you better business decisions.

How much does time clock software cost?

Time clock software was once purchased in shrink-wrapped boxes with a one-time fee... but with a catch. If you needed support, you had to pay for it, sometimes in the form of an annual support agreement you paid every year. Modern time clock software has changed that model with monthly payments and free support.

The cost is roughly the same as it was before, but with improvements such as automatic backups, real-time reporting, availability from any browser, free support, and free upgrades.

Still, there are those who draw the line on cloud software with monthly fees. If you fall in that camp, your best option is to handle time tracking with spreadsheets or done manually. The trade-off is knowing it will require more work on your part.

If you are open to the idea, there are a variety of providers who offer different prices. If one clock system fits your needs and budget, then the cost should be considered a valued expense.