Staying compliant with timekeeping laws

If your business operates in the territory of the USA or has a contract with a governmental agency, you must follow the timekeeping and labor management rules established by the US Department of Labor (DOL) and the Defense Contract Audit Agency (DCAA).

If your business operates in the territory of the US and falls into categories covered by the Fair Labor Standards Act (FLSA), you are probably already familiar with the requirements it sets.

The FLSA has set out guidelines for regular employees (salaried employees) or independent contractors (hourly-based employees) regarding: 

On the other hand, if you are the type of business that establishes a contract with a governmental agency - for the exchange of some kind of goods or services, you have to follow the Defense Contract Audit Agency (DCAA) rules.

It is DCAA's responsibility to ensure your company complies with timekeeping and accounting regulations, and it can audit your business to make sure:

The European Union also has certain timekeeping rules, aimed at protecting the health and safety of employees, making tracking overtime and break time a crucial part of complying with the directive.

According to the EU's Working Time Directive, employers in the EU have to ensure minimum standards considering:

However, the implementation of this directive differs from state to state and national labor laws established in each EU country.

How Clockify makes compliance effortless

Clockify’s functionalities help you to:

Manage employee information

According to the FLSA, employers must keep certain information about their employees, no matter the employee type.

With Clockify, you can customize the data you keep on each employee with custom user fields.

Custom user fields in Clockify
Create custom user fields and create your unique employee database.

These custom user fields can later be visible in reports, too. When exporting a detailed time record for employees, you just need to check which fields you want to export and see in Excel and CSV.

Custom user fields in detailed reports
Select the fields you want to see in your reports.

FLSA also implies that you need to keep a record of hourly rates for employees.

Hourly billable and cost rates for employees
Keep information on hourly billable and cost rates for your employees.

Track employee working hours

To continuously track work hours and stay compliant with time-tracking rules in your country, you need to select the best time-tracking method that works for your team.

Clockify provides you with options of using a timer, timesheet, auto-tracker, or a kiosk.

Whichever time-tracking method you choose, you can record (and export) the data on your:

See short explanations for each Clockify time-tracking method.

Tracker lets you be specific about the tasks you are working on. You can enter a specific description of your work, the project and the client it relates to, and the timer will record the start and the end of your activity, adding to the log of your entries.
Or you can switch to manual mode and enter the start and end times for past, present or future tasks.

Timer in Clockify
With a timer, you can also log entries with a tag to make reporting easier, or add any custom fields you might need.
Timesheet in Clockify
Fill in your daily/weekly activities in a timesheet.
Kiosk in Clockify
Clock in and out with a PIN code.
Auto-tracker in Clockify
Clockify auto-tracker works on Mac, Windows, Linux OS.

Whether you use one way to track your time, or combine multiple, all data will be synchronized in your timesheet - whichever device you use.

Track employee overtime

By the DCAA and EU’s timekeeping requirement, all overtime must be recorded, regardless of whether employees are paid by the hour or have fixed salaries. And to comply with FLSA overtime pay rules, you first have to record overtime work.

In Clockify, you can set daily/weekly/monthly time tracking targets, so every minute over the set target will be marked as overtime.

Set time-tracking targets in Clockify
Customize your time-tracking targets and reminders.

You can easily have an overview of what’s been scheduled, who worked how much, and how much of it was overtime.

Besides that, the same report shows you the start, end, and break times for each employee.

Attendance report in Clockify
See the start and end of work time, overtime, and time off for all employees.

Free Overtime Pay Calculators

Approve employee timesheets

The DCAA states that “both the employee and the supervisor need to review and approve the time records”.

This means you need a proper approval system for employee working hours, with two-step timesheet verification.

After entering their working hours, employees can submit their timesheets for approval - signaling that they reviewed them.

Submit timesheets in Clockify
Once employees review their timesheets, they can submit them to their managers for approval.

The admins or assigned team managers can then proceed to review it and approve it, or reject it if it needs to be corrected.

Approval feature in Clockify
All submitted timesheets can be approved with one click.

The other option is to go to the Detailed Report and correct the entry by themselves, to cut down on the time for the whole process.

Detailed report in Clockify
Find the time period that needs to be corrected and change it.

Admins can use the reminders feature to remind all members to submit their timesheets, and all team managers to approve them.

Reminder to submit and approve timesheets in Clockify
From here you can manage reminders for the approval process.

Manage employee absence

Depending on your team, your company’s time off policies can be in regard to national holidays, sick leaves, vacations, personal or parental leave, or any other absence policy you create for your employees.

Clockify lets you select certain dates as holidays and define those dates as non-working days.

Time off policies in Clockify
From here you can manage time off - holidays and other policies.

Besides that, you can create custom time off policies, manage employee time off requests, and track accruals and overall balance.

Time off feature in Clockify
Track employee absence.

Your time-off policies can be customized in Clockify to details, so you can even:

This way, your employees can combine hourly, half-days, or whole days off - and it will all be recorded and automatically updated in Clockify.

Get instant reports on employees and tracked time

The DCAA states that time reports have to be produced at least every month (if not more frequently).

For FLSA recordkeeping compliance, Clockify allows you to generate comprehensive reports with just a few clicks, and keep them within the system for as long as necessary.

With Clockify, you can export reports on a daily, weekly, or monthly basis, or for any date range that suits your organization. You can filter the data you wish to include in a report - users, teams, projects, clients, tasks, etc.

Exported PDF reports in Clockify
Daily, weekly or monthly exported reports that you can share with anyone.

As FLSA allows it, you can adjust the time entries with the rounding feature to the nearest whole number, up or down, and then export your report.

Rounding option in Clockify
Switch the button, and round your time entries for clean reports.

Audit the records and trace changes

The DCAA states that “if approved (i.e. locked) timesheets are changed, you have to have an immutable record of all the changes and an audit trail (so that it's clear what has been changed, when, and why)”.

Clockify provides you with the ability to lock timesheets after a certain date, to prevent any changes.

Locking timesheets in Clockify
Set a locking date and timesheets won't be able to be edited by users past that certain date.

However, if something has to be changed after the set date, with the audit log you will have a record of what’s been changed and where.

Audit log feature in Clockify
A history of a time entry.

If you want to minimize checking and error fixing, you can set up required fields to prevent users to save time entry without the crucial information you need for reporting or administration purposes, e.g.: project, task, tag, or description.

Setting required fields in Clockify
Set the rules for time entry saving.

The benefits of time tracking

While respecting all the rules is an absolute necessity, it’s good to remind ourselves of all the benefits time-tracking can have for ourselves and our organizations.

Benefits for employees

Some of the benefits of time tracking for employees include:

Benefits for employers

Apart from providing a solid basis for compliance with laws and regulations, some of the benefits of time tracking for employers include:


Read more about FLSA, DCAA and EU’s timekeeping compliance:

➡️ FLSA Working Time Regulation

➡️ DCAA Compliant Timekeeping

➡️ EU Time Tracking Law

DISCLAIMER: Using a time tracking system such as Clockify does not automatically make you compliant with the time tracking laws. You need to make sure you're using the software correctly. We advise consulting with legal experts.