Paper time cards are the way time tracking was done decades (even a century) ago. Employees write down their start and end times on a piece of paper and submit that paper to payroll each week. Seems simple but a closer look shows this manual payroll process is a logistical and security nightmare waiting to happen.
The Purpose of Time Tracking
First off, time tracking is an absolutely necessary process. Under the Fair Labor Standards Act, all employers are required to keep accurate time records of the hours that their nonexempt employees work. Construction companies must track the hours every employee works in order to pay them for all hours work, including overtime pay. According to the FLSA, “Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay.” Construction companies that violate FLSA overtime laws put themselves at risk of a lawsuit, that’s why accurate time tracking recordkeeping is so important.
Using paper to track this essential process is bad for several reasons, here are three big ones.
Using Paper Increases your Risk of Errors
When the time tracking process is manual, the more data being processed, the greater the chances of entry errors. Consider when a worker or supervisor fills in a time card, they may add a few minutes here and there. They may be fudging their time intentionally or just not remembering exactly when they clocked in or clocked out. A few minutes here and there add up to hours your company pays for but gets no value from. Once workers record their time on a paper time card, the office staff has to input the information into a payroll system. Not everyone’s penmanship is stellar. It is up to your office staff to decipher the numbers and if it’s the last time card of the week, a tired employee can easily transpose two numbers. And those errors could prevent your workers from getting paid for all the time they worked, which could put you at risk for a lawsuit. Fines can rack up to hundreds of thousands of dollars for violating FLSA overtime laws.
Manual Time Tracking Processing Takes Time
According to the 2021 Construction Business Report, 32% of construction companies say manual processes are where their businesses experience the most inefficiencies. It makes sense considering how long the time tracking process takes for construction companies that use paper time cards. First your staff has to collect the actual time cards and manually transfer information from paper into a payroll system, entering the same data a second time. In addition, staff has to spend time sorting through paper files to complete compliance reporting, like certified payroll reporting required by the Davis-Bacon Act. When you’re dedicating tons of time to inefficient processes, other areas of the business are being neglected.
Paper is Costly
Companies that use paper time cards need to maintain a constant supply of paper, ink and even filing equipment (folders, dividers, cabinets, etc.). The individual cost of time cards often seems insignificant, but it can quickly add up over time, especially for construction companies with many workers on multiple sites. Add to that time and travel costs associated with distributing and collecting paper time cards. If they are being completed at multiple job sites, getting them to your back office for processing creates an unnecessary additional expense. Add up all of these costs for yourself and see just how much paper time cards are costing you. Or, even easier, use our payroll savings calculator instead.
Relying on paper time cards to track employees’ hours is far more trouble than they’re worth. A paper time card leaves you open to employee theft and mistakes, and processing them is needlessly time-consuming. Using an automated time tracking system will also eliminate the inaccuracies of illegible and messy handwritten time cards save thousands of dollars every year on materials and save the time it would normally take to process payroll.