Employee Timesheets: US Law Asks for Hours Each Day, Not a Time Clock, and Other Answers Staff Need

Most rules people believe about employee timesheets are stricter than the law. The US Department of Labor does not require a time clock or any particular format: its recordkeeping fact sheet says employers may use any timekeeping method they choose, including letting workers write down their own times, as long as the record is complete and accurate (DOL Fact Sheet #21). The law does ask for the hours worked each day and the total for each workweek.

Where employee timesheets usually go wrong is in the details around that requirement: which breaks count as work, what happens to leave hours, how far a time can be rounded, and how the same week gets split across projects. This guide answers those questions for both sides, the people filling in timesheets for employees and the managers who rely on them, with a filled in week you can check line by line.

What an employee timesheet records

An employee timesheet is a record of the time one person worked over a period, usually a week, entered by the employee or captured by a system and then checked by a manager. If you want the general definition and the history of the format, our article on traditional timesheets and their alternatives covers it. This article covers what goes on the sheet and why.

In practice there are two kinds of timesheets for employees, and many companies need both in one record:

Hourly staff on a single job mostly need the payroll side. Consultants, agencies, engineers and anyone billed to clients need project timesheets as well, and salaried staff often fill in only the project side, which is covered in our guide to timesheets for salaried employees.

What the law requires you to record

Rules for employee timesheets differ by country, and the timesheet is usually the document that proves an employer followed them. Three examples show how different the starting points are:

• United States (federal). For non exempt workers, the Fair Labor Standards Act recordkeeping list includes the hours worked each day and the total hours worked each workweek, alongside pay data such as the regular hourly rate and overtime earnings. Time cards and the other records wage calculations are based on must be kept for two years, and payroll records for three (DOL Fact Sheet #21). Many states add their own rules.
• European Union. In Case C-55/18 the Court of Justice ruled in 2019 that member states must require employers to set up “an objective, reliable and accessible system” measuring the time each worker works each day (CJEU press release 61/19). National laws apply this in different ways.
• United Kingdom. Workers cannot work more than 48 hours a week on average, normally averaged over 17 weeks, unless they opt out in writing (GOV.UK), so employers need records that show the average.

For more countries, pay deadlines and what happens when a timesheet is late, see our guide to timesheet submission; for retention and policy questions from the employer side, see timesheet management.

What counts as hours worked

The hardest part of filling in an employee timesheet is not the arithmetic but deciding what belongs on it. US federal rules, summarized in DOL Fact Sheet #22, work as a checklist even for teams elsewhere, because they describe edge cases every company meets.

The last row is the one that surprises managers. Answering email after hours is work if the employer knows about it and lets it happen, so it belongs on the timesheet rather than being left off to look tidy.

How to fill out an employee timesheet: a worked week

Here is one week for an hourly, non exempt employee in the US, paid an illustrative $24 an hour, with a 30 minute unpaid lunch on full days and two paid 15 minute breaks that stay inside the worked time.

Three things stand out in this employee timesheet:

• 49 paid hours, 1 overtime hour. Federal overtime is owed at one and a half times the regular rate for hours worked over 40 in a workweek, and hours cannot be averaged over two weeks (DOL Fact Sheet #23). Pay for vacation, holidays or illness is not compensation for hours of employment and cannot be credited toward overtime (29 CFR 778.218), so the Thursday PTO goes in its own column and does not push the week further over 40. A company policy can be more generous; the timesheet should still keep leave separate so payroll can apply it.
• The short breaks stay in. If the employee had deducted two 15 minute breaks on each of the four working weekdays, the sheet would show 39 hours. That costs $60 for the week: one regular hour at $24 and the one overtime hour at $36.
• Saturday is part of the same workweek. The workweek is any fixed 168 hour period the employer sets, so a weekend shift counts toward the same 40 hour threshold as weekday hours.

Project timesheets: the same week by task

A payroll timesheet stops at 41 hours. Project timesheets ask where those 41 hours went, which is what client billing, project budgets and the next estimate depend on. Here is the same employee’s week split by work:

Billable hours are 26.5 of 41, or about 65%. Two details make project timesheets useful rather than decorative, and both apply to timesheets for employees on any team. First, the task totals must add up to the same 41 hours as the payroll record; a project sheet that shows 37 hours while payroll shows 41 hides four hours nobody can bill or analyze. Second, the internal lines matter. Eight and a half hours of admin in one week is a finding in itself, and it disappears if people only log billable work.

If you are starting from a spreadsheet, our free project timesheet template has these columns already, and the Excel timesheet templates cover weekly and monthly payroll layouts. Once those records pile up, they are a good source for your next project estimate, as explained in what your old timesheets can tell you.

Setting up timesheets for employees: five decisions

Before rolling out timesheets for employees, settle five things in writing. Most disputes about an employee timesheet come from one of them being left open.

1. Which view you need.

   Payroll only, project only, or both in one record. If anyone bills clients or tracks project budgets, choose both, so the two totals cannot drift apart.

2. Start and stop times or daily totals.

   US federal rules ask for hours each day, not clock times, but start and stop times make breaks and overtime easier to check. Hourly staff usually record times; salaried project staff usually record totals per task.

3. The task list.

   Project timesheets work only if the list of customers, projects and tasks is short enough to pick from quickly and specific enough to bill from. Add internal tasks for meetings, training and admin.

4. Increment and rounding.

   Decide whether entries are in minutes, tenths or quarter hours, and make any rounding symmetric, as explained below.

5. Cycle and approver.

   Name who approves each person’s timesheet and by when, and line the deadline up with payroll and invoicing.

Rounding and time increments

Recording 8:07 as 8:00 is legal in the US within limits. Federal rules accept the long standing practice of recording start and stop times to the nearest 5 minutes, tenth of an hour or quarter hour, provided it is used so that, over time, employees are still paid for all the time they actually worked (29 CFR 785.48).

The test is symmetry. Rounding to the nearest quarter hour in both directions averages out. Rounding every arrival up and every departure down does not, and at 10 minutes a day over about 250 working days it removes more than 40 hours of paid time a year from a full time employee. For project timesheets, increments are a business choice rather than a legal one: 6 minute units (a tenth of an hour) are common where time is billed, while 15 or 30 minute units are enough for internal reporting.

How often to fill in an employee timesheet

Fill in daily, submit weekly. Entries made the same day are reconstructed from fresh memory and calendar notes; entries made on Friday afternoon for the whole week are reconstructed from guesswork, and they drift toward neat numbers like 8.0 a day. The submission cycle can follow payroll, but the entry habit should not. For deadlines and reminders that get timesheets in on time, see our timesheet submission guide, and for what happens after submission, see the timesheet approval guide.

Who should see an employee’s timesheet

An employee timesheet holds personal data: where someone was, when they were sick, how many hours they worked. Treat access by role rather than making every timesheet visible to everyone.

• The employee sees and edits their own entries until submission.
• Their approver sees the full sheet, including leave, because approval needs it.
• Project managers need hours on their own projects, not the person’s sick days or hours on other clients.
• Payroll and HR need totals, overtime and leave, usually not task detail.
• Clients see only what is billed to them, often summarized by task.

Openness about project timesheets inside a team can help, since people see where hours actually go, but it works best when the data shown is project time, not personal attendance.

Common employee timesheet mistakes

Most errors on timesheets for employees are honest, and most come from the same few habits:

• Logging the schedule instead of the day. Writing 9:00 to 17:00 because that is the shift, when the real day ran from 8:40 to 17:25.
• Leaving out short breaks or adding long ones. Deducting paid rest breaks shortchanges the employee; logging a long lunch as work shortchanges the employer.
• Forgetting leave. A half day of sick leave left off the sheet breaks PTO balances and makes the week look short.
• Copying last week. Repeating the previous week’s tasks saves time but carries over hours that did not happen.
• Dumping hours into one task. Putting everything under “general” or a single project makes the project timesheet useless for billing and estimates.
• Leaving off unrequested work. Late emails and weekend fixes count if the employer allows them, as the hours worked table above shows.

Deliberate padding is a different problem with its own warning signs. Our article on timesheet fraud covers it.

Employee timesheets in actiTIME

actiTIME keeps the payroll and project views of an employee timesheet in one record, so the hours approved for pay are the same hours reported by project.

• Two ways to enter time. The weekly Timesheet View takes total hours per task per day, in HH:MM or decimal format, while the Calendar View records start and stop times on time cards that can be dragged and copied to other days.
• Work, leave and location in one sheet. Employees log leave against leave types such as vacation or sick time, and can mark where they worked, for example office or remote.
• Overtime by rule. With Overtime Registration on, overtime can be calculated automatically and shown to the user or kept for reports, or entered manually, and it appears in the Time Balance and Overtime Report.
• Approval and locking. Employees submit the week with one click, managers approve or reject it, and locking prevents changes after approval or period close.
• Less typing. Tasks from the previous week can be added in one click, the mobile app and the Chrome extension capture time away from the desk, and email notifications remind people about incomplete timesheets.
• Project reports. The Time-Track Report groups the same entries by customer, project, date, user or type of work, and billable types of work feed billing and cost reports.

We reduced payroll processing to 45 minutes per week

actiTIME is very robust, integrated well into your business process, and most important, helps you focus on your business instead of monkeying around with technology. actiTIME has reduced our payroll processing from 4-6 hours per week to 45 minutes per week.

Try actiTIME

actiTIME costs from $5 per user per month, and teams of up to 3 users can use the permanent free version. You can start a free trial and run your next week of employee timesheets in it.

FAQ

Is a timesheet the same as a time card?

Not quite. A time card traditionally records clock in and clock out times for attendance and pay. A timesheet can include those times, but it usually also shows what the time was spent on, which tasks or projects, and whether it was billable. For hourly payroll either can satisfy US federal rules, since the law cares that hours are complete and accurate rather than about the format.

Can a manager change an employee’s timesheet?

A manager can correct errors, but the corrected record still has to reflect the time actually worked, because unrequested work the employer allowed must be paid in the US. The safe practice is to send the timesheet back with a comment so the employee makes the change, or to record who changed what and why. In actiTIME, editing an approved or rejected timesheet returns its status to Not Ready, so the change goes through approval again.

Should employees log admin time and internal meetings?

Yes. Hourly employees must be paid for it, and on project timesheets internal time explains why billable hours are lower than scheduled hours. Log it against named internal tasks such as team meetings, training or admin rather than spreading it across client projects, so billing stays accurate and the internal load becomes visible.