A number of companies suffered collateral damage last winter as a result of a cyber attack on a major provider of time and attendance software. With your timekeeping systems compromised, how do you determine what to pay your non-exempt employees, particularly with a payroll processing deadline looming?

The Governing Principles

To properly pay overtime-eligible employees, you have to know how many hours they have worked. Fair Labor Standards Act (FLSA) rules require employers to maintain and preserve records of "[h]ours worked each workday and total hours worked each workweek." No particular timekeeping method or form is required, as the rules and U.S. Department of Labor (DOL) guidance make clear. As the DOL explains, "employers may use any timekeeping method they choose. For example, they may use a time clock, have a timekeeper keep track of employee's work hours, or tell their workers to write their own times on the records. Any timekeeping plan is acceptable as long as it is complete and accurate." In the lead-up to the FLSA's passage in 1938, the prevalent timekeeping system for many employers was a mechanical time clock, into which employees physically inserted "punch cards" to record start and stop times. Other employers—then and to a lesser extent now—rely on handwritten timesheets. Today's technology allows employees to record their hours worked with a mouse click, a press of the thumb on a smartphone or other mobile device, or a fingerprint scan, among other...

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