Is time tracking legal in the US?

Written by Asim Qureshi
By Asim Qureshi, CEO Jibble

The legality of employee time tracking is nuanced and not as simple as many believe it to be, but the simple answer is that yes, it is legal, as long as employees’ rights are upheld, and, in fact, in many cases, employers are required to track employee time.

If an employee works for an employer, courts generally take the view that they have a right to know how and where that employee works. This extends to various methods, including the use of GPS tracking, which in many cases has been upheld as a legitimate means for employers to monitor their staff’s location since its early days.

What are the US Laws that Govern Time Tracking?

Now, in the US, there are several rules and regulations that businesses must comply with when implementing employee time tracking. The key relevant laws are the Fair Labor Standards Act (FLSA), the National Labor Relations Act (NLRA), also known as the Wagner Act, and various state laws.

The FLSA is a federal law that regulates minimum wage and overtime requirements for employees. Under the FLSA, employers are required to keep accurate records of the hours worked by non-exempt employees, which includes tracking the time they spend on work-related tasks. Non-exempt employees, by definition, are entitled to overtime pay, while exempt employees are not.

Employers are also required to pay non-exempt employees overtime for any hours worked over 40 in a work week.

The NLRA is also a federal law. It protects the rights of employees to engage in concerted activities for mutual aid or protection. This encompasses the fundamental right to seek better working conditions which means to discuss wages, hours, and other working conditions with other employees. The NLRA could enter the equation when employees object to being tracked, as it could be viewed as a violation of their rights to engage in concerted activities.

In addition to federal laws, there are also various state laws that may impact the legality of employee time tracking. For example, some states require employers to obtain consent from employees before tracking their time, while others prohibit employers from tracking certain types of information, such as biometric data. Since the start of 2023, over 15 biometric privacy law proposals have emerged across 11 states (including Arizona, Hawaii, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, New York, Tennessee, Vermont, and Washington). It’s an area that HR managers should keep up to date with.

Understanding the caveats

While employee time tracking is legal in the US, the caveats need to be understood. To ensure compliance with these laws, we suggest employers take note of the following when implementing employee time tracking:

  1. Non-exempt employees – under the FLSA, employers are required to keep accurate records of the hours worked by non-exempt employees.
  2. Security measures – employers must ensure that they have appropriate security measures in place to protect the personal data that is collected through the time tracking system. This may include agreements with providers, encryption, access controls, and regular security audits.
  3. Consent from employees – some states require employers to obtain consent from employees before tracking their time. Even if not required by state law, obtaining consent from employees is generally considered a best practice.
  4. Information about employee rights – employees have certain rights under federal and state laws, such as the right to discuss working conditions with other employees and the right to access their personal data, and, ideally, employers should provide employees with information about these rights and how they can exercise them.
  5. Transparency about the data – employers should be transparent about the data that is collected through the time tracking software, attendance tracker, or time and attendance software, including giving employees information about exactly what data is being collected, how it will be used, and who it will be shared with.
  6. A time tracking system should not used to discriminate – employers must ensure that the time tracking system is not used to discriminate against employees. To give an example, if a particular employee takes longer breaks than others, this alone should not be used as a basis for disciplinary action.

Some types of time tracking, such as the use of biometric time tracking, may be subject to additional state laws or regulations. For example, Illinois has a Biometric Information Privacy Act (BIPA) that requires employers to obtain written consent from employees before collecting their biometric data and to comply with specific security requirements for storing and sharing biometric data.

Employee Time Tracking Concerns

In addition, employees may raise objections to time tracking on the grounds that it violates their privacy or interferes with their rights to engage in concerted activities under the NLRA. While employers generally have the right to monitor their employees’ activities on company time, there’s really a fine line of tracking employee time legally in the US. Employers must do so in a way that does not infringe on employees’ rights or create an atmosphere of surveillance or mistrust. Employers need to be mindful of employees’ rights to engage in concerted activities and avoid mistrust that could damage morale and productivity.

Final thoughts

Employee time tracking is generally legal in the US, but it comes with specific rules and regulations. To stay within the legal boundaries, it’s crucial to identify which employees are non-exempt and adhere to the Fair Labor Standards Act (FLSA) guidelines. This involves obtaining consent from employees, informing them about their rights, implementing security measures, maintaining transparency about the collected data, and ensuring that the time tracking system is not used for discriminatory practices. These may seem like simple measures but they can help you reap the benefits of time tracking software without the legal headaches.