Withholding Pay for Lack of Timesheets

If your business is having trouble collecting time sheets from your employees, here’s what you need to know about legal ways to handle it. The Fair Labor Standards Act sets no requirements for how your business must track employee hours, but it does make tracking employee hours your responsibility, not the employees. While nothing prevents you from informally delegating to your employees the duty of keeping records of their hours, you do so largely at your own risk. The employer must ensure that accurate records are being kept and that employees submit timesheets on time. The employer cannot delegate this legal duty to anyone else.

This can be frustrating since many companies rely on their employees to help improve time tracking and gather accurate and reliable data. If an employee has missed the timesheet deadline, some employers may even argue that they cannot pay them as they don’t know the record of their hours.

It is generally advised that employers have clear policies and procedures for timesheet submission and payroll processing. If an employee consistently fails to submit time sheets on time, employers should address the issue through communication, counseling, or disciplinary processes outlined in their policies rather than withholding pay. There is generally no legal basis to withhold pay or institute fines for late time sheets.

Instead of withholding pay, employers can implement other solutions to address late timesheets. This may include implementing reminders, providing training, or using progressive disciplinary actions if lateness is a recurring issue. Implementing pay deductions without proper authorization or legal basis can expose your business to legal risks, including wage and hour violations and potential lawsuits.

In Indiana, you must pay your employees either every other week, or twice a month. Your business must pay employees for hours worked whether or not the employee has turned in timesheets for the period in question. That would be the case even if the employee failed to record hours worked. In other words, employers are obligated to pay even in the event of either lack of timesheets or failure to register time. Generally, employers may not withhold pay except in rare circumstances.

If you have questions about wage payment, employees tracking hours, or other employment-related issues, contact the Indiana employment attorneys of McNeelyLaw at 317-825-5110 today.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.