Biometric Time Clock: Benefits and Legal Concerns

For small businesses, hours lost to time theft can add up fast. Biometric time clocks are a high-tech fix: scan a finger, log a shift, problem solved. But they also raise big questions about privacy and legality.

In this guide, we’ll break down how biometric time clock systems work, where the law stands, and what to think about before you invest. We’ll also explore privacy-friendly alternatives that still keep your team accountable.

TL;DR: Biometric timekeeping and your small business

Need a quick rundown about using biometric data for time tracking? Let's do it.

The most common biometric measurements for employees include:

• Fingerprints
• Palms (hand geometry)
• Facial scans
• Iris patterns

The top benefits of using a biometric employee time clock are:

• Eliminating buddy punching
• More precise time tracking
• Enhanced security
• A tight audit trail
• Reduced payroll errors
• Administrative time savings
• Improved accountability
• Cost savings

Some legal considerations when you’re thinking about using biometric time tracking:

• Biometric time clocks are banned in some states, including New York, Oregon, Illinois, and Washington.
• They aren’t always 100% accurate, and can capture false matches.
• For some employees, there are accessibility issues that can violate The Americans with Disabilities Act (ADA).
• Data security leaks can’t be undone.
• There are significant fines for privacy violations.

Alternatives to biometric time clocks:

• Time clock app solutions like Homebase
• PIN-based time clocks with enhanced security
• Badge and card systems

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What is a biometric time clock and how it works

A biometric time clock is a system that uses employees’ unique body measurements for clocking in and out. This is to prevent time theft and buddy punching, and gives you the most accurate time tracking data when you’re paying employees.

Biometric time clock software typically uses fingerprints, hand geometry, facial recognition, or iris scans to identify individual employees.

Implementing these solutions happens in a few stages:

• Enrollment: Capturing biometric samples like fingerprints, which are then converted into a mathematical equation known as a “biometric template”.
• Storage: Those biometrics are stored in a reader, device like a smartcard, or a centralized database.
• Matching: When employees get scanned, their “probe” metric is automatically compared to the biometric data from enrollment.

Biometric time clocks are faster than manual tracking, but they rely on sensitive personal data. Passwords can be changed—fingerprints can’t—and if that data is stolen, the damage is permanent.

Obviously, this makes this time clock tracking pretty controversial, to the point where there are legalities to consider. But if you learn how to manage the risks, biometric clocks offer real advantages.

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Biometric timekeeping: advantages and business benefits

If you’ve ever wondered whether all the hours on your timesheets were actually worked, you’re not alone. Time theft, intentional or not, can quietly eat into your margins.

Here’s a look at how a biometric time clock system can help you out:

Accuracy and security benefits

Biometric time clocks help take the guesswork (and the loopholes) out of tracking employee hours

• Eliminates buddy punching: With punch cards or PINs, it’s easy for employees to clock in for each other. Biometric clocks require physical presence—unless someone’s pulling a James Bond, not John from Accounts Payable.
• Precise time tracking: No lost cards or forgotten codes—just a fingerprint or face. Employees always have what they need to clock in, saving managers from constant troubleshooting.
• Enhanced security: Biometric data can’t be stolen or left behind like a key card. When connected to access control, these systems can also help keep unauthorized people out and protect confidential data.
• Audit trail: Every clock-in and clock-out is digitally logged. If payroll compliance or labor laws come into question, you’ve got the records to prove you’re solid.

Operational efficiency gains

Beyond better time tracking, biometric systems can help streamline your day-to-day operations with:

• Reduced payroll errors: Clean data means fewer mistakes. Biometric time tracking helps you avoid awkward paycheck disputes and keeps payroll running smoothly.
• Administrative time savings: No more chasing down missed punches or fixing timesheets. Your team gets time back for more important work.
• Improved accountability: Accurate tracking makes labor law compliance easier. It also builds trust—everyone knows the system keeps things fair.
• Cost savings: Biometric systems may cost more upfront, but the long-term savings from less time theft and fewer errors can be substantial.
• Ease of use and integration: Most systems are easy to learn and work with tools you already use. That means a better workflow—not a new one..

If you’re feeling squicked out about using peoples’ body metrics or have pretty simple needs, a free clock in and out app has all the same perks.

With Homebase, you can manage time punching for up to ten employees completely for free.

Biometric time clock legal considerations and compliance

Okay, so we’ve talked about the perks—now let’s get into the legal stuff:

Are biometric time clocks legal?

The short answer? It depends. While employers have always required personal info like social security numbers, biometric data is more controversial, and is even banned in some states.

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In Illinois, the Biometric Information Privacy Act (BIPA) heavily regulates how biometric data is allowed to be used. In Texas, the Capture or Use of Biometric Identifier Act (CUBI) has the same purpose, and in Washington, the Washington Biometric Law entirely bans the use of biometric data for commercial purposes.

Even in states where biometrics are legal, state labor laws might still require written consent, data retention policies, and strong security protocols to comply with the law.

Since laws vary (and are changing fast), check your state’s labor regulations before moving forward—and keep an eye on emerging legislation through tools like the State Biometric Privacy Law Tracker.

Biometric time clock lawsuit risks

The controversy surrounding biometric data collection has only intensified with the rise of identity thieves and hackers. As a result, states are taking privacy laws seriously, and violations will cost you big.

Take Illinois’s BIPA law: companies found violating it can be fined up to $5,000 per employee. White Castle faced a massive lawsuit for allegedly scanning employee fingerprints without proper consent nearly 10,000 times, and was facing a $17 billion fine. In 2024, they reached a settlement, but the case is a clear look at what’s at stake.

While biometric data can save you thousands in lost wages, violating these laws (whether intentionally or not) will cost you much more. We’d recommend getting legal guidance if you go the biometric route.

Accessibility challenges

Biometric time clocks aren’t always built for everyone. Employees with disabilities may find it hard—or even impossible—to use certain systems. For example, scanners are often mounted too high for wheelchair users, and facial or iris recognition tools may not be compatible with screen readers or assistive devices.

If employees can't reliably clock in, it creates friction, frustration, and potential legal issues under the Americans with Disabilities Act (ADA). Legally, you’re required to offer accessible alternatives, which might mean you’d need a secondary clock in options.

Best practices for legal compliance

If biometric systems are legal where you operate, that’s a great start—but it’s not the finish line. You’ll need clear internal policies to stay compliant and protect your team’s privacy.

Your biometric compliance policy should cover:

• What type of biometric data you’ll collect
• Why you’re collecting it
• How the data will be collected and stored
• How long you’ll keep it
• How you’ll secure it

You’ll also need to provide this policy to all employees and get their written consent before collecting any biometric data. From there, you’re responsible for keeping the data encrypted, restricting access, and securely deleting it when someone leaves the company.

Class action lawsuits against companies like Walmart and Pret A Manger show that even big brands can fall short here—and that regulators are watching closely. Small businesses can’t afford those same kinds of lawsuits, so keep on top of your compliance plan and consult legal counsel before implementing it.

If you’re already breaking out in hives thinking about lawsuits, consider opting for a cloud-based employee time clock app like Homebase instead. 

Note: This isn’t legal advice. Always consult an attorney before collecting or storing biometric data.

Biometric time clock systems: types and features

Here’s a rundown of the four basic types of biometric time clock systems, and some things to keep in mind about each:

Fingerprint time clocks

Fingerprint systems are simple and widely used—employees just press a finger to the scanner, and the system matches it to stored data. While easy to set up, they’re not flawless: wet hands, lotion, or dirt can cause misreads. If your team works with their hands a lot, this might cause daily headaches.

Facial recognition time clocks

These systems scan facial features to confirm identity, no touching required. Some models can still identify employees wearing masks, which is great for healthcare or lab settings. Others need a full face visible, so be sure to match the tech to your team’s needs.

Biometric iris time clocks

Iris time clocks operate much like biometric facial recognition systems, and use infrared light to capture the unique pattern of an employee’s eye. They’re highly accurate, but can be finicky; glasses, contacts, or long lashes might interfere, which can get frustrating fast. 

Hand geometry systems

Also known as biometric palm time clocks, these use the shape and pattern of an employee’s hand or palm to verify their identity. The system guides hand placement and scans the surface area for a match. It’s a solid middle ground between fingerprint and facial recognition, but still not immune to user error.

Best biometric time clock alternatives

Biometric time clocks can offer accuracy and security, but for many small business owners, the risk or cost involved just doesn’t make sense.

These alternatives offer similar benefits without all the red tape:

Time clock app solutions

If you want the functionality of a biometric system without the privacy and compliance headaches, a cloud-based time clock app might be your best bet.

These clock in apps allow employees to clock in and out from a:

• Tablet
• Smartphone
• POS system
• Computer

Some employee time clock apps (like Homebase!) also include GPS tracking, photo verification, and break tracking to prevent time theft without bringing biometric data into it. Cost-effective and reliable!

PIN-based time clocks with enhanced security 

With PIN-based systems employees enter a personal code at a shared kiosk or terminal, and the system logs their hours. It’s simple to manage and avoids privacy concerns, but you’ll want to make sure employees keep their codes secure and don’t share them with coworkers.

Badge and card systems

Badge or key card time clocks use scannable IDs to clock employees in and out—usually via a magnetic swipe or RFID chip. They’re easy to use and familiar to most teams, but the downside is that badges can be easily lost, stolen, or shared.

Best time clock app for small business: software alternatives

Looking for accuracy without panicking about privacy?

Here are three employee time clock apps that’ll do the job:

1. Homebase time clock app

Not to brag, but Homebase is a standout option for small businesses, especially with hourly teams. We give small business owners an easy, privacy-conscious way to track employee time without the legal complexities of biometric systems.

You can create schedules, track hours, and manage labor costs from anywhere at any time—and without losing time in the process.

Our free time clock app:

• Prevents time theft and buddy punching: Homebase ensures employees are physically present to clock in. Photo verification adds an extra layer of accountability.
• Privacy-conscious features: Use tools like geo-fencing, PINs, and photo capture—no biometric data required. This keeps your team’s personal information safe.
• Convenient and accessible time tracking: Turn phones, tablets, computers, or POS systems into time clocks. Employees can also check schedules and PTO right from their devices.
• Built-in legal compliance: Since we don’t use fingerprints or facial scans, there’s no need to worry about consent forms or storage rules. But we do keep up with labor and privacy laws so you know you’re payroll compliant.
• Works in real-world environments: Ideal for industries where dirt, gloves, or busy shifts can trip up biometric systems. Great for restaurants, construction, and retail.
• Automatic updates: No expensive hardware to maintain or replace!

Best of all, our add-ons can also help you with payroll, HR, and more. Why wouldn’t you want everything in one place?

For many business owners, we’re the sweet spot between control and simplicity. Chat with us today to get a free time clock that frees up your time.

2. QuickBooks Time (TSheets)

QuickBooks Time (TSheets) syncs directly with QuickBooks, streamlining payroll, billing, and reporting workflows for established users.

Features include:

• Job and shift scheduling
• Real-time reports
• Time-off management
• Alerts and notifications
• Photo attachments

The QuickBooks Time app starts at $30/month +$10/user/month after one admin. They’re currently offering a $15/month deal for the first 3 months.

3. Clockify

Clockify is a lightweight, flexible time tracker that comes with a paid or free time clock app. Its base function is timekeeping, which makes it a reliable starting point if that’s your main priority.

Features include:

• Unlimited tracking
• Mobile, desktop, and kiosk options
• Timetracker and timesheet
• Tracking integrations
• Team activity reports

The cheapest paid plan is $5.49 /user/month billed annually (or $ 6.99 if billed monthly), and comes with more robust features for time off, invoicing, and more.

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Free time clock app options for budget-conscious businesses

Good news: both Homebase and Clockify both have free versions. While a regular time clock app for small businesses doesn’t get too pricey (especially compared to biometric clocks), free plans are a great option for smaller teams with simple needs.

Just make sure they come with:

• Accessible tracking through phones, tablets, computers, etc.
• Integrated scheduling
• Compliance and privacy features

Employee time clock app implementation: getting started

Feeling ready to choose your time clock set up? Here are some final considerations.

Choosing between biometric and app-based solutions

Before you commit to a biometric or time clock app, think through:

• Legal restrictions in your state
• Your team's work environment (e.g. gloves, dirt, mobile work).
• Privacy concerns vs. security needs.
• Budget for setup, maintenance, and training
• If your team has shown concern about biometrics

Implementation best practices

As you get ready to roll out your system:

• Communicate clearly with your team before launch
• Offer hands-on training and support early on to avoid hiccups
• Set clear policies for clock-ins, breaks, and corrections
• Keep on top of your time data for issues or trends
• Stay up to date on legal and compliance changes—if you’re using Homebase, we’ll do this work for you

FAQ about biometric time clocks

Here are some frequently asked questions about biometric time clock systems:

What is a biometric time clock?

A biometric time clock is a time tracking solution that utilizes unique body measurements to identify employees as they clock in and out. These tools most often involve fingerprints, handprints, facial recognition, or iris scans.

Are biometric time clocks legal?

Biometric time clocks are legal in some parts of the United States. Since laws vary by state, you’ll need to check your state and local labor laws to determine the legalities of biometric time clocks in your area.

What is the biometric time clock lawsuit?

Notable biometric time clock lawsuits have involved corporations like White Castle, Walmart, and Pret a Manger using biometric data without employee or customer consent.

Are biometric time clocks accurate?

Biometric time clocks are not always accurate. Scanners can misread data if employees have damp or dirty hands, wear contacts, or work in poor lighting. 

Make the right time tracking choice for your business

Biometric time clocks can help reduce time theft and improve accuracy, but they’re not without challenges. From privacy concerns to legal risks, the decision to use them shouldn’t be taken lightly.

If a biometric system doesn’t feel like the right fit, a tool like Homebase can still give you reliable time tracking without the extra cost or complications. The right solution is the one that supports your workflow and makes managing your team easier—not harder.

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