What are hours worked?

Hours worked refers to the total amount of time an employee spends performing job-related duties during a workday or workweek. This includes not only the time actively spent on tasks but also certain periods when the employee is required to remain on duty, even if no specific work is being performed.

For example, hours worked may include the time an employee spends on their assigned shift, waiting for instructions, attending required training, or traveling between work sites. Accurate tracking of hours worked is critical for calculating wages, overtime, and ensuring compliance with labor laws.

With Homebase, you can easily track hours worked in real time, automate calculations, and ensure every employee is paid correctly.

Why hours worked matter

Tracking hours worked accurately is essential for small businesses because it:

Determines employee pay based on hourly rates or salaried exemptions
Ensures overtime compliance under the Fair Labor Standards Act (FLSA)
Helps manage labor costs by understanding exactly where time is spent
Protects against wage disputes with clear, documented records
Improves scheduling by providing insights into staffing needs
Supports accurate billing for service-based businesses charging clients for labor

If hours worked are recorded incorrectly, it can lead to overpayments, underpayments, compliance issues, or even costly legal disputes.

What counts as hours worked

Not all employee time is treated the same under labor laws. According to the FLSA and most state regulations, hours worked generally include:

Time on duty – All hours the employee is required to be on the employer’s premises or at a designated work location
Waiting time – If an employee is waiting and cannot use the time freely for personal activities, it is considered hours worked
On-call time – When an employee must remain on-site or close enough to respond immediately, that time is typically counted
Training or meeting time – If attendance is required and related to the job, it is hours worked
Travel time during the workday – Travel between job sites or client visits counts as work time
Short breaks – Rest periods of 20 minutes or less are generally paid and considered hours worked

However, meal breaks of 30 minutes or more, off-duty waiting time, or commuting from home to work are typically not considered hours worked unless specific exceptions apply.

Legal requirements for tracking hours worked

The Fair Labor Standards Act (FLSA) requires employers to keep accurate records of all hours worked for non-exempt employees. Some key legal points include:

Overtime pay must be provided for any hours worked over 40 in a workweek, unless an exemption applies.
Breaks and meals must be recorded properly to ensure compliance with state laws that may require paid or unpaid breaks.
Record retention – Employers must keep detailed records of hours worked for a specific number of years (usually at least three).
State and local laws may have additional requirements for minimum wage, overtime, or daily work limits.

Failing to properly track hours worked can result in wage claims, fines, and legal penalties.

Challenges with tracking hours worked

Many small businesses face challenges when it comes to accurately tracking hours worked, such as:

Missed punches when employees forget to clock in or out
Buddy punching where one employee clocks in for another
Manual timekeeping errors on paper timesheets or spreadsheets
Inconsistent policies for breaks, waiting time, or on-call shifts
Disputes over overtime when hours aren’t clearly recorded

These challenges can be solved with a reliable time tracking system that ensures accuracy and accountability.

Best practices for managing hours worked

To ensure your business tracks hours worked correctly:

Use digital time clocks to eliminate manual entry errors
Set clear policies for what counts as paid work time, including breaks and on-call duties
Train managers and employees on accurate timekeeping procedures
Review timesheets regularly to catch and correct errors early
Send reminders for missed punches or incomplete time entries
Integrate time tracking with payroll to save time and reduce mistakes

These practices help keep payroll accurate, reduce compliance risks, and improve employee trust.

Hours worked and overtime

Overtime is directly tied to hours worked. For non-exempt employees, any hours worked over 40 in a workweek (or as defined by your state laws) must be paid at 1.5 times the regular hourly rate.

Accurate tracking of hours worked ensures:

Employees are fairly compensated for extra time on the job
Employers remain compliant with federal and state overtime laws
Labor costs are controlled by identifying patterns of unplanned overtime

Without precise records of hours worked, overtime compliance becomes difficult and risky.

How Homebase simplifies tracking hours worked

Homebase makes it easy for small businesses to track hours worked accurately and stay compliant. With Homebase, you can:

Turn any device into a secure time clock for clock-ins and clock-outs
Automatically calculate total hours, breaks, and overtime for each employee
Prevent buddy punching with PIN or photo verification
Monitor hours worked in real time to stay on top of labor costs
Send reminders to employees who forget to clock in or out
Integrate hours worked directly into payroll to save time and reduce errors

With accurate, automated time tracking, you’ll always know exactly how many hours were worked—and ensure your employees are paid correctly.

Explore Homebase Payroll to simplify hour tracking, stay compliant with labor laws, and make payroll easier than ever.

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