10 Guidelines by FLSA every Attendance Tracking Cloud Software must follow

Attendance tracking cloud software plays a pivotal role in modern workplaces, especially with the increasing prevalence of remote work. There are several crucial considerations to ensure that this software aligns with the Fair Labor Standards Act (FLSA) guidelines, which govern key labor aspects like minimum wage, overtime pay, recordkeeping, and child labor. This article outlines the ten FLSA guidelines that attendance tracking cloud software must follow to guarantee fair labor practices and accurate recordkeeping.

What is Attendance Tracking Cloud Software?

As remote work becomes more common, attendance tracking cloud software is a valuable tool for managing employee attendance. It allows employers to monitor remote workers’ hours, ensures fair compensation, and maintains an accurate record of their work activities. Additionally, employees can clock in remotely, oversee their working hours and overtime, and validate that they receive proper compensation. In essence, this software benefits both employers and employees, offering attendance monitoring and several other advantages.

A robust attendance tracking cloud software should, at a minimum, support the following functions:

• Work Schedule and Leave Management: Tracks employee work schedules and leave requests.
• Accurate Salary Calculations: Calculates employee salaries, whether based on hourly wages or piecework.
• Meal Break Management: Monitors mealtime breaks (if not included in the company’s shift policy).
• Accessibility: Is accessible from any location with the appropriate login access.
• Calendar Management: Manages employee calendars and suggests improvements for better time utilization.
• Prevents Fraudulent Reporting: Deters fraudulent time entries and shift attendance records.

Understanding FLSA

The U.S. Congress drafted the Fair Labor Standards Act (FLSA) in 1938 to establish fair labor practices and protect the rights of U.S. employees. FLSA covers various aspects, including minimum wage, overtime compensation, record documentation, and child labor. It applies to private and government employees, encompassing full-time and part-time workers. Three departments enforce FLSA in different domains:

• The Wage and Hour Division (WHD) oversees private and government establishments.
• The U.S. Office of Personnel Management handles the Executive Branch.
• The U.S. Congress is responsible for the Legislative Branch.

FLSA Guidelines

FLSA mandates that employers maintain accurate records of employees’ attendance and work-related details to ensure fair compensation. These records must include personal information and work profiles. They should be regularly updated to reflect hours worked, overtime, leaves, and other relevant data. Failure to do so leads to legal consequences, including criminal prosecution. Offenders may face fines of up to $10,000 or even imprisonment.

Coverage Under FLSA

FLSA coverage extends to government offices, U.S. Post Office workers, and those engaged in commerce and production. FLSA clearly distinguishes exempt and non-exempt employees, providing separate lists for those exempt from minimum wage, overtime, or both. The attendance tracking cloud system must be customized to align with the employee’s policies and exemptions under FLSA.

How Should Attendance Tracking Cloud Software Maintain and Protect Digital Records to Meet FLSA Retention Requirements and Avoid Legal Penalties?

The Fair Labor Standards Act (FLSA) establishes clear rules for what employee records must be kept, how long they must be stored, and the level of accuracy and accessibility employers must maintain. When companies adopt attendance tracking cloud software, compliance becomes easier—but only if the software is configured with proper retention, security, and data governance practices. Failing to meet these requirements exposes companies to wage disputes, labor violations, penalties, and legal investigations.

Here’s a comprehensive breakdown of how cloud-based attendance systems should handle record maintenance and protection to fully comply with the FLSA.

1. Maintain a Comprehensive Set of FLSA-Required Records

To meet FLSA retention rules, attendance software must collect and store all essential employee work-related data, not just login and logout times. The Wage and Hour Division (WHD) clearly outlines which records must be maintained for 2 or 3 years, depending on the category.

Software must store these core datasets for at least 3 years:

• Employee information (name, address, gender, occupation)
• Rate of pay
• Weekly compensation details
• Deductions and additions to wages
• Total weekly hours worked
• Overtime payment details
• Work schedules

And for at least 2 years:

• Timecards, attendance logs, biometric entries
• Electronic audit trails
• Break and meal period logs
• Schedule changes
• Timesheet approvals
• Leave and PTO records

A compliant attendance system must:

• Automatically capture all required data
• Store it in secure databases
• Retain it for the legally mandated time period
• Prevent unauthorized deletions or modifications

This ensures every digital record is available for audits, disputes, and wage claim verifications.

2. Implement Automated Record Retention Policies

Attendance tracking cloud software should never rely on manual processes for data retention.

Under FLSA rules, deleting or altering time records—even accidentally—can trigger investigations or penalties. Therefore, the system must have automated retention policies, such as:

• 3-year automatic archival for required long-term records
• 2-year policies for timecards and supporting documents
• Version logs that capture edits to timesheets
• Automatic backups to redundant cloud locations
• Immutable storage to prevent tampering Automation ensures companies remain compliant without constant administrative oversight.

3. Provide Secure, Tamper-Proof Audit Trails

One of the biggest risks in digital attendance systems is unauthorized edits to employee hours—either intentional or accidental. The FLSA requires employers to maintain accurate historical records, meaning the original entries should never be overwritten or lost.

A compliant system must maintain a full audit trail, including:

• Original clock-in and clock-out time
• Time modifications
• Who made the edit
• When the edit was made
• Reason for modification
• Approval by supervisors

Audit trails protect employers from wage claims and demonstrate good-faith compliance if an investigation occurs.

4. Safeguard Records With Strong Access Control and Authentication

FLSA does not explicitly dictate cybersecurity standards, but it requires employers to maintain secure and reliable records. That includes preventing unauthorized access or alteration.

Cloud attendance software must enforce:

• Role-based access control (RBAC) — only authorized staff can view or edit records
• Multi-factor authentication (MFA) — especially for admin roles
• Encrypted passwords and secure session management
• Unique user IDs for every employee and admin
• Controlled permission levels for supervisors, HR, and payroll teams

This prevents unauthorized individuals from viewing or manipulating time and wage data.

5. Encrypt Data in Transit and at Rest

FLSA is focused on data accuracy and retention, but encryption is essential for ensuring that the records being retained are secure and unaltered. Modern attendance systems must apply encryption at multiple points:

Data in transit (during upload or synchronization)

Should be protected by secure protocols like HTTPS/TLS.

Data at rest (when stored on servers)

Should be encrypted using advanced standards such as AES-256.

Backups and archival databases

Must also be encrypted to prevent breaches.

Encryption ensures:

• Time records cannot be intercepted
• Sensitive employee information is protected
• Archived logs remain secure for the required 2–3 years
• Ensure Geographic and Legal Compliance in Data Storage

Many attendance systems use global cloud providers. However, employers must know where their employee data is stored, because FLSA compliance can be complicated by cross-border storage.

A compliant system must:

• Store data in regions that meet U.S. labor and data protection laws
• Follow WHD requirements for accessibility during audits
• Guarantee that records can be retrieved quickly regardless of storage location

This is crucial because FLSA mandates that employers produce records promptly when requested during audits or investigations.

6. Provide Easy Retrieval, Export, and Reporting Capabilities

FLSA requires employers to provide time and wage records within a reasonable timeframe during audits. Attendance software must allow quick:

• Export of time records (CSV, PDF, or Excel)
• Retrieval of historical logs
• Download of audit trails
• Generation of weekly and bi-weekly compliance reports

Fast retrieval protects employers during audits and prevents legal delays that could lead to fines.

8. Maintain Redundant Backups and Disaster Recovery

A compliant attendance tracking system must ensure data is never lost. Losing FLSA data—even due to technical failure—is a violation.

The system should include:

• Multiple redundant cloud backups
• Automated daily or hourly backups
• Disaster recovery mechanisms
• Storage across multiple data centers

Even if one server fails, the required 2–3 years of records remain intact and accessible.

9. Protect Biometric and Sensitive Data With Extra Safeguards

If attendance software uses biometrics (fingerprint, face recognition), stricter protections apply:

• Encrypted biometric templates
• No raw biometric data storage
• Clear employee consent processes
• Strict anti-tampering mechanisms

Because biometric data is sensitive, poor storage practices can lead to lawsuits beyond FLSA violations.

10. Provide Compliance Documentation and Built-In FLSA Features

Finally, a fully compliant cloud attendance tool should provide features designed specifically for FLSA, such as:

• Overtime detection
• Automatic classification settings for exempt and non-exempt employees
• Break and meal period logging
• Geofencing for accurate mobile time tracking
• Approval workflows that validate time entries before payroll

Attendance software must not just store data—it must help prevent non-compliant timekeeping practices.

FLSA Timesheet App

Wage and Hour Division (The U.S. Department of Labor) introduced the Timesheet App as a part of the Attendance Management Cloud Software. This app(iOS and Android) allows employees to monitor their work hours, overtime, breaks, and leaves. It calculates salaries accurately based on the data entered by the employee, whether hourly or piecework. This app empowers workers to track their hours. It ensures they receive fair compensation, a preventive measure against wage theft.

FLSA Guidelines for Attendance Tracking Cloud Software

Attendance tracking cloud systems must prioritize user privacy to avoid violating FLSA guidelines. These systems should comply with FLSA regulations regarding workweek schedules, overtime pay, recordkeeping, and child labor standards. Here are the ten fundamental guidelines:

1. Track Login/Logout:
   Attendance tracking cloud software efficiently monitors employees’ clock-in and clock-out times, break periods, leaves, and overtime. This system promotes accurate payroll calculations and self-regulation.
2. Personal Details:
   Employers must maintain essential employee details, like name, address, gender, DOB, and employment history. The cloud system ensures secure data storage.
3. Overtime Pay:
   FLSA defines a workweek as forty hours, with any additional hours classified as overtime. The software must maintain transparent records of working hours, allowing for accurate overtime pay calculations.
4. Employee Schedule Details:
   Competent attendance tracking cloud software should include a defined work schedule, hourly rates, and overtime pay. It should track daily and weekly hours worked, including overtime, streamlining salary calculations.
5. Weekend Compensation:
   While FLSA does not require special allowances for weekends, attendance tracking systems should ensure that overtime compensation is provided when applicable.
6. Leave Policy:
   FLSA does not regulate leave policies typically outlined in employment contracts. Attendance tracking software should, however, maintain clear records of leaves and absences.
7. Payroll Calculations:
   Attendance tracking systems integrate payroll calculations, allowing accurate compensation based on the data entered by employees, such as hourly wages and hours worked.
8. Deductions:
   Recordkeeping is essential to ensure that employees receive fair compensation, meeting the minimum wage requirement of $7.25 per hour (as my knowledge cutoff date in 2021). Tipped employees may have different rules, but employers must ensure compliance.
9. Meal Breaks:
   The software should provide precise meal break records to record employees’ work hours accurately, preventing potential wage discrepancies.
10. Record Maintenance:
    Employee records should be securely stored by the attendance tracking cloud software. Various documents, including employment offers and payroll records, have specific retention periods. Upon request, these records should be available for inspection by the Wage and Hour Division of the U.S. Department of Labor (DOL). Failure to produce these records can result in criminal prosecution and fines, with repeat offenders facing possible imprisonment.

In conclusion, the Fair Labor Standards Act safeguards employees’ rights to fair compensation for their work. Employers must maintain accurate work hours, wages, and overtime records in compliance with FLSA guidelines. Attendance tracking cloud software should align with these guidelines to ensure that employees receive proper and fair compensation and avoid potential legal consequences. Every company using an attendance tracking system should follow these guidelines to uphold reasonable labor practices.

SOURCES

1. https://factorialhr.com/blog/employee-time-tracking/
2. https://taskhours.com/blog/The-Role-of-Time-Tracking-and-Attendance-Management-in-Compliance-and-Legal-Matters
3. https://www.insightful.io/blog/flsa-compliant-pc-screen-time-tracker
4. https://psicosmart.net/blogs/blog-can-time-and-attendance-management-software-help-comply-with-fair-labor-standards-a-deep-dive-215535