Time tracking: Where employers need to record working hours

Tracking time and attendance is crucial for companies of any size. Knowing how many hours your employees work is important to ensure that workers are paid correctly and that legal limits on working hours and overtime are respected. What’s more, timekeeping can help businesses improve employee health by protecting employees from overworking. 

In addition to the benefits of time tracking for both employee and employer, time recording can be a legal requirement and hence pose a compliance risk for international organizations with a globally distributed team. That’s why we’ve compiled an overview of time tracking rules and laws around the world.

Employee time tracking describes the practice of keeping record of employee working hours and is part of an organization’s time and attendance management. Timekeeping is primarily used to ensure payroll accuracy and compliance with rules on working hours and overtime, but it can also be leveraged as a means to measure efficiency and productivity in the workplace. Employers can track working hours in several different ways, including timesheets, clock in clock out systems, apps and GPS tracking.

Whether it is to make sure employees don’t get overworked or to check team members are putting in enough work, employers must know how many hours their staff are clocking. This applies both to in-office and remote workers. For remote workers, the need to accurately track working hours is even greater, since their attendance can’t be tracked by their physical presence.

Although many remote-first companies establish a culture of trust and decide against controlling their staff’s working hours and activities, time tracking can be a helpful tool to increase transparency in the organization and to improve employee health. Working too much decreases work-life balance and can ultimately lead to stress, exhaustion and burnout. With the risk of burnout being particularly high among remote workers, supporting mental health in remote teams is a top priority, and keeping tabs on working hours is part of it. 

Timekeeping is also crucial when it comes to an employee’s right to disconnect. It’s only when time and attendance are recorded properly that a business can verify that an employee gets enough time to rest and switch off. Another reason why time recording is a hot topic in globally distributed teams is that employee time tracking is a legal requirement in many countries.

For organizations with a remote team, this means that they have to comply with different time tracking laws around the world. If they fail to do so, they not only risk fines for non-compliance, but could also face further consequences like going over the legal limits for working hours and overtime.

Not every country in the world has specific timekeeping rules. But in those cases where time recording is mandatory, it’s crucial for employers to know what the exact rules are. Here is an overview of employee time tracking regulations by country.

Australia

Regulations on working time, rest days, vacation and more are assembled in Australia’s Fair Work Act. Weekly working time is limited to 38 hours - any additional work is considered overtime. The Fair Work Act also outlines the timekeeping requirements put on employers. According to the regulations, employers have to keep time and wages records for 7 years. Employers can find record-keeping templates on the official website. 

For more details on Australian employment law and regulations, check out our Australia Global Hiring Guide.

Canada

Canada’s Labor Code sets the federal rules for working time, leave entitlement and more. Under federal rules, a standard workweek is 40 hours, with a minimum weekly rest period of one full day. In no case should an employee’s working time exceed 48 hours in one week or 10 hours in one day. The Labor Code also mandates employers to keep accurate records that show the hours an employee has worked each day. The records must be kept for 36 months.  

For more details on Canadian employment law and regulations, check out our Canada Global Hiring Guide.

European Union

The 2003 European Working Time Directive Act sets clear rules and regulations for employee working hours and overtime in order to protect employee health in the European Union. In 2019, the directive was replenished with a ruling by the European Court of Justice (ECJ), which stated that employers in the EU must track employee working hours to ensure all the regulations are met. The ruling mandates the use of “objective, reliable and accessible systems for recording and measuring the duration of time worked each day by every worker”.

Following the ruling, several member states have acted to implement national policies on time recording. However, the national regulations vary greatly when it comes to the strictness of the rules, and some countries like France haven’t implemented a general obligation to record time and attendance yet.

Germany

Employees in Germany are allowed to work up to 48 hours per week. The daily maximum is 10 hours. Overtime must be specifically regulated in the individual employment contract. Although Germany hasn’t adapted a national law to match the ECJ ruling, there are timekeeping rules that pre-date the 2019 European regulations. According to German law, employers must record any working hour that exceeds an employee’s regular 8 daily hours. Furthermore, timekeeping is legally required for minimum wage workers.

For more details on German employment law and regulations, check out our Germany Global Hiring Guide.

Netherlands

According to a comparative study by Ius Laboris on time recording in the EU, the Netherlands have the strictest rules on working time and timekeeping, together with Spain. The Dutch Working Hours Act rules that employees shouldn’t work more than 12 hours in one day, or 48 hours per week on average over a 16-week period (55 hours over a 4-week period). The absolute maximum number of hours is 60 per week. 

Employers are requested to record employee work hours, breaks, vacation days and sick leave days, and the records must be made accessible for employees. The records must be kept for at least 52 weeks. However, the rules don’t apply to employees earning more than three times the national minimum wage.

For more details on Dutch employment law and regulations, check out our Netherlands Global Hiring Guide.

Spain

On 12 May 2019, Royal Decree 8/2019 entered into force, which requires employers with employees in Spain to track working hours and attendance for all employees. However, the decree doesn’t clarify how working time is to be recorded - except that companies must have an hourly record for each employee. The time records must be kept for 4 years.

The maximum weekly working time is limited to 40 hours. Within one day, an employee cannot work for more than 9 hours, the common standard being 8 hours. Overtime is capped at 80 hours per year.

For more details on Spanish employment law and regulations, check out our Spain Global Hiring Guide.

Switzerland

An employee’s standard workweek should not exceed 45 hours. Any work performed beyond that is considered overtime, which must be compensated with a wage supplement equal to 25%. Employers have a legal obligation to track and document daily and weekly working hours for all their employees, as regulated in Article 46 of Switzerland’s Employment Law and Article 73 of Order 1 on the Employment Law.

Time records must be kept for 5 years. It is up to the employer to decide which time tracking systems or instruments they use. 

For more details on Swiss employment law and regulations, check out our Switzerland Global Hiring Guide.

United Kingdom

The governing legal framework for working hours and more are the 1998 Working Time Regulations. Weekly working hours shouldn’t exceed 48 hours on average (calculated over a 17-week period), but daily hours can be arranged in a flexible manner. Hours must be recorded in a timesheet and time records must be kept for at least 2 years. 

For more details on UK employment law and regulations, check out our United Kingdom Global Hiring Guide.

United States

Working time, overtime and other general working conditions are regulated by the Fair Labor Standards Act (FLSA), which applies to employers covered by federal regulations. Working hours are set at 40 hours per week, with additional hours being considered overtime. The act also includes rules for tracking employee attendance, stating that employers must keep employee time and pay records.

Time records should include both daily and weekly working hours, as well as overtime and the beginning of each workweek. The records are to be kept for 2 years. In addition to the federal regulations, there are state laws employers need to comply with. 

For more details on US employment law and regulations, check out our United States Global Hiring Guide.

Time tracking rules are just one example of the many employment-related laws and regulations employers need to observe in order to stay compliant. Organizations with a globally distributed team face a particularly high risk of non-compliance, since they need to comply with the different labor laws of every country. An easy way for international businesses to ensure full compliance when hiring remote employees abroad is to use an Employer of Record. 

An Employer of Record (short: EOR) is a global employment solution which allows companies to hire employees in foreign markets without having to set up a legal entity. As the employee’s official employer, the EOR takes over all legal and administrative responsibilities linked to the employment, while the business contracting the EOR remains in full control of the employee’s day-to-day activities.

At Lano, we work with a global network of trusted Employer of Record partners covering 170+ countries. Hire remote employees in less than 2 weeks without worrying about compliance. Book a demo with our team to learn more.