Tracking employee attendance is important for a few reasons:
Proper employee attendance ensures that your employees aren’t engaging in time theft, which is when your company pays employees for hours they didn’t actually work. Time theft is more common among hourly employees, since they can fudge their time clock numbers.
That said, time theft isn’t unheard of among salaried employees. Salaried employees who use the internet for personal matters during work hours are technically stealing your time. However, if your employees set their own hours or you pay them a flat salary regardless of how much time their work takes them, time theft may be a nonissue so long as productivity is consistent.
Hourly employees are nonexempt from the federal Fair Labor Standards Act (FLSA), so you must pay them overtime. Both you and these employees must track the hours they work, and you must pay time-and-a-half for all time an employee works beyond 40 hours in a workweek. For example, if an employee who makes $20 an hour works 45 hours during a workweek, you must pay them $30 (their usual $20 wage multiplied by 1.5) for each of those final five hours.
Salaried professionals are exempt from the FLSA’s overtime provisions, which is another reason why tracking attendance matters more for hourly than salaried employees. Learn more in this guide to exempt employees.
Tracking employee attendance can reveal patterns of behavior, such as certain employees not showing up for their shifts. This repeated missing of shifts is known as absenteeism, and it can have a substantial impact on your finances. A repeatedly absent employee can stretch your team thin, reducing the quality of your services. In cases where you accidentally still pay absent employees, absenteeism can become time theft.
Hourly positions are common for customer-facing roles such as retail associates, restaurant servers and call center agents. In each case, proper employee attendance gives each team member adequate time to interact with customers. As a result, customers won’t feel rushed or neglected and are thus more likely to buy from you again.
In manufacturing plants, assembly-line employees may be hourly workers, and their presence may be crucial for even heavily automated processes. For example, if the employee on your dessert production company’s cake assembly line isn’t around to smooth out the icing, you’ll be left with a massive gap in your production. This absence could lead to a backlog that disrupts your whole supply chain.