How Time Tracking Helps You Avoid Overtime Surprises
4 min read
No one likes payroll surprises—especially when they come in the form of unexpected overtime hours or worse, a lawsuit.
As a small or midsize business owner, you’re required to pay employees correctly under the Fair Labor Standards Act (FLSA). That includes paying time-and-a-half for hours worked over 40 in a workweek for non-exempt employees.
The challenge? Without proper time tracking in place, overtime can sneak up on you—and cost far more than just time and a little frustration.
Let’s break down how reliable time tracking protects your business from overpaying, underpaying, and unknowingly breaking federal labor laws.
The FLSA doesn’t take intent into account. Whether you forgot to track time, an employee stayed late without approval, or someone simply failed to log out, the law says you’re responsible for paying for all hours worked.
If an employee files a claim, you could owe:
These surprises don’t just sting—they can seriously disrupt your business.
Unplanned overtime can wreck your labor budget. Even a few unexpected overtime hours each week can push your costs higher than planned.
For example, an employee making $20/hour who racks up 5 hours of overtime per week costs you an extra $150—over $7,500 a year.
Multiply that across your team, and you’re burning through your margins without realizing it.
If employees track their time on paper, in texts, or not at all, you have no clear record to back up payroll decisions. And if someone challenges their paycheck—especially former employees—you could be left with no way to defend yourself.
In the eyes of the law, lack of documentation means the employee’s word often wins.
A good time tracking system gives you real-time visibility into who’s approaching 40 hours. With alerts and reports, you can take action—reassign a shift, approve the extra time, or ask a manager to follow up—before the overtime happens.
Digital time tracking records when employees clock in and out, down to the second. It automatically calculates hours worked, applies rounding rules, and stores that data securely.
So if questions come up months later, you have the records to prove what was worked and what was paid.
Beyond just paying overtime correctly, FLSA also requires accurate recordkeeping of:
Trying to manage all of this manually? That’s asking for something to go wrong.
While the FLSA sets the federal minimum, many states have additional rules around:
If you operate in multiple states—or have remote workers—it gets even more complex.
Time tracking systems like CadenceHCM help simplify this by applying the correct rules automatically based on location and role.
Overtime laws aren’t optional. And “We didn’t know” or “We didn’t track it” isn’t a valid excuse in court.
Whether you’re trying to keep labor costs under control or protect your business from compliance risk, time tracking isn’t just a nice-to-have—it’s your first line of defense.
CadenceHCM helps business owners avoid overtime surprises with a time and attendance system that:
We’ll help you stop guessing—and start paying people correctly, every time.
