Why You Should Track Hours for Your Salaried Employees

August 12, 2020 | 192 views

Why You Should Track Hours for Your Salaried Employees
Why You Should Track Hours for Your Salaried Employees

Hourly employees track hours so they will receive accurate paychecks. For salaried employees, this is not necessary because they already know what their paycheck will be. But tracking all hours for employees is important. It will be beneficial for them and for your organization’s accuracy in records. Understanding the variability in employees’ routines is important to use their time effectively and to pay them appropriately.

It’s Good for Employees

Chances are that your managers and other salaried employees will not want to track their hours. It will represent one more thing they have to do, and it doesn’t seem to affect their pay directly. It may take some convincing, but they will eventually see that it is helpful for them. Why? Because those same exempt employees probably do put in extra hours both in the office and at home. Tracking hours might uncover inefficient use of time or an unbalanced workload. For many, all those hours might suggest a higher salary is due.

When it comes time for reviews, employees and employers can review their time, efforts, work ethic, and future opportunities for growth. Some may find themselves under-compensated while others may need coaching on time management. Either way, there will be a productive conversation over work hours and effective use of time and money.

It Makes You More Sympathetic

Try as we might, we don’t always understand each activity of our salaried employees. We trust them, and then we sometimes fail to see what all they do. It’s easy to forget that someone traveled halfway across the country (and back) the day before for an important meeting. We know they were gone, forget the details, and then expect the next day to be business-as-usual, in the office, on time.

When we consistently track the hours on projects, meetings, and sales calls, we will be more sympathetic when our valued employee is overwhelmed. We can more readily accommodate aid for them and justify it financially, too. Whether it’s a flexible work schedule or a new hire, the proof will already there, and we can respond more promptly to protect our employee and their productivity.

It Makes Vacation, PTO, and OT Calculations Accurate

While it varies by state, if you have salaried, non-exempt employees, you must track their hours to calculate overtime, sick time, and PTO hours earned. It is critically important that you meet legal minimums for sick time and overtime. Overtime is based on hours and consecutive days worked. Sick time availability is often calculated as a portion of hours worked. For salaried employees, the hours need to be accurate to reflect what is truly earned.

Protect yourself by keeping records. You are more likely to be questioned about non-exempt employee hours. Still, if your records are squeaky clean for every level of employee, it will demonstrate your commitment to paying employees accurately if you are scrutinized about labor regulations.

It Improves your Job Costing

For those who bill for services by project, time tracking of all employees means that you can bill accurately for the full cost of the services you provide. Invoices for completed work will be detailed and verifiable. Estimates for new projects will reflect superior knowledge of costs based on the scope of work requested. Job costing must accurately relate revenues to expenses. Your prices, hiring practices, and services will all reflect a clear understanding of what is required to complete a project.

Tracking all hours for hourly and salaried employees will help balance your organization’s expenses and earnings to create more profit.

Author Profile Jon Forknell is the Vice President and General Manager of Atlas Business Solutions, Inc., a software marketing company specializing in employee scheduling software, including ScheduleBase employee scheduling software, and other business software solutions. In the past, Jon has been recognized by the U.S. Small Business Administration as a SBA Young Entrepreneur of the Year. Atlas Business Solutions was named as one of Software Magazine’s Top 500 Software Companies in 2004 through 2007, and 2010, 2013, 2014, 2016, 2017, and 2018.

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