Timesheets, overtime and payroll for field crews: track every hour and stay compliant

The CLOCK system

To keep labor under control, use the CLOCK system:

• C — Capture time accurately, as it happens.
• L — Learn the rules for what counts as work time.
• O — Overtime planned, not discovered.
• C — Check and approve every week before payroll.
• K — Keep records and know labor cost per job.

C — Capture time as it happens

Paper timesheets filled out at the end of the week are guesses. Use a mobile time clock app, often built into field service software, where each employee clocks in and out on their own phone, and ideally clocks into each job. GPS stamps and job codes show where people were and what they worked on.

Make it simple: one tap to start the day, one tap to switch jobs, one tap to clock out. If the app is hard, the crew will forget, and you'll be back to guesses.

L — What counts as work time

This is where many service businesses get into trouble. As a general rule, time counts as work when the employee is doing something for the company's benefit. That includes loading the truck at the shop, picking up parts at the supply house, driving between jobs, waiting at a customer's home when the tech was told to wait, required meetings and training, and cleaning up at the end of the day.

Normal commuting from home to the first job and from the last job back home is generally not work time under federal law, but that changes if the employee must first report to the shop, pick up the truck and materials, or if the drive is part of the job. The rules have nuances, so write your policy with professional advice.

Drive time and take-home trucks

Take-home trucks save time, but they raise questions. If a technician drives from home straight to the first job in a company truck, that commute is often not paid, as long as the travel is within normal commuting distance and there are no required tasks before leaving. If the tech has to stop at the shop, load parts or take calls from dispatch during the drive, the clock usually starts earlier.

Put the rule in writing, explain it to the team and apply it the same way to everyone. Inconsistency is what turns a small misunderstanding into a claim.

Meal and rest breaks

Federal law doesn't require meal breaks, but many states do. If your state requires a 30-minute unpaid meal break, the employee must be fully relieved of duty during that time. A tech who eats lunch in the truck while taking dispatch calls is working, and that time must be paid.

Have employees clock out and in for meal breaks in the app, so you have a record that the break was taken.

O — Plan overtime instead of discovering it

Overtime isn't always bad. During the summer rush or storm season, paying time and a half can be cheaper than hiring and training someone new. The problem is unplanned overtime: the owner sees 52 hours on a tech's timesheet on Friday and has no idea why.

Set a weekly overtime budget, check hours every Wednesday and adjust the schedule for Thursday and Friday. Dispatchers should see each employee's hours for the week before assigning a late call.

The regular rate trap

Overtime is calculated on the regular rate of pay, not just the base hourly wage. Production bonuses, commissions, spiffs and piece-rate earnings are generally included in the regular rate. If a tech earns $25 an hour plus a $300 weekly production bonus and works 45 hours, the overtime premium must include that bonus.

Flat-rate and piece-rate pay plans are common in service trades, and they can be legal, but only if you still track hours, meet minimum wage for every hour worked and calculate overtime correctly. Many owners have learned this through a lawsuit.

The salary myth

Paying a technician a salary doesn't make them exempt from overtime. Exemptions depend on the job duties and a minimum salary level, and field technicians rarely meet the tests. Office managers, dispatchers and even some supervisors may also be non-exempt. When in doubt, treat the role as non-exempt and track hours.

Employees or contractors

Calling a crew member a 1099 contractor doesn't change the rules if you control when, where and how they work, provide the truck and tools, and they work only for you. Misclassification can lead to back overtime, taxes, penalties and workers' comp problems. Real subcontractors run their own business, set their own methods and work for other companies too.

On-call and after-hours work

Emergency service means someone is on call at night and on weekends. Whether on-call time must be paid depends on how restricted the employee is. A tech who must stay at the shop, or respond within minutes and can't use the time freely, is usually working. A tech who can stay home, go out and just needs to answer the phone is often not, but every call they take and every hour they spend on a job counts.

Many companies pay a flat on-call stipend plus hourly pay, with a minimum of two hours, for each callout. Remember that the stipend generally goes into the regular rate for overtime, and a late-night call often pushes the tech past 40 hours for the week.

Explain it to the crew

Technicians sometimes resist time tracking because they feel watched. Present it for what it is: the way to make sure every hour they work is paid, including drive time and that last callout on Saturday. When the crew sees their overtime paid correctly and their questions answered, adoption follows quickly.

C — Check and approve every week

Before payroll runs, the manager reviews every timesheet: missing punches, jobs without clock-ins, unusually long days, overtime, breaks. The employee confirms their hours in the app. This ten-minute review catches mistakes while everyone still remembers the week.

Never edit an employee's time without a reason and a record. If you correct a missed punch, note why and have the employee confirm it. Quiet edits that reduce hours are exactly what wage claims look for.

Run payroll with a provider

A payroll service handles tax withholding, filings, direct deposit and year-end forms, and connects with most time tracking apps. The cost is usually modest compared with the risk of getting taxes or deadlines wrong. Choose one that imports hours directly, so nobody retypes timesheets. Every time hours are copied by hand from one system to another, errors creep in, and the employee who is shorted two hours notices before you do.

Pay on a consistent schedule that meets your state's rules, and give employees clear pay stubs showing hours, rates, overtime and deductions.

K — Keep records

Federal rules require employers to keep payroll records for at least three years and time cards for at least two, and many states require more. Digital records from your time app and payroll provider make this easy, as long as you don't delete old accounts when you switch software.

Know labor cost per job

Once hours are clocked by job, you can see the true labor cost of every job and every type of work. Loaded labor cost includes wages plus payroll taxes, workers' comp, benefits and paid time off, often 25% to 40% on top of the base wage.

Compare the labor hours you estimated with the hours actually worked. If water heater installs are quoted at 3 hours and take 4.5 on average, your price or your process needs to change.

A worked example

A plumbing company with six technicians used paper timesheets. Techs earned $28 an hour on average, and the owner estimated about 240 paid hours a week. When the company switched to a mobile time clock with job codes, the first month showed 258 paid hours a week, including an average of 11 overtime hours that nobody had planned, and about 14 hours a week of unassigned time between jobs.

The owner reorganized routes by area, moved parts pickups to one morning run and checked hours every Wednesday. Overtime dropped to 4 hours a week and unassigned time to 6. Using a loaded rate of about $38 per regular hour and $52 per overtime hour, the savings came to roughly $360 on overtime and $300 on idle time each week — close to $34,000 a year. The job costing data also showed that drain cleaning jobs were underpriced by about 40 minutes of labor, so the owner raised that price by $45.

Write a simple time policy

• When the workday starts and ends, and how to clock in and out.
• How drive time, shop time and take-home trucks are handled.
• Meal and rest break rules for your state.
• Who approves overtime and how to request it.
• How missed punches are corrected.

Have every employee sign it, and review it once a year with your payroll provider or attorney.

Where to start this week

Pick a time clock app, set up job codes for your main services, write the one-page policy and schedule a 15-minute meeting to explain it to the crew. Then review the first week's timesheets together. For more on labor costs, read what your hour actually costs and how to design pay plans and commission for technicians.

Frequently asked questions

Do service technicians get paid for drive time?

Driving between jobs during the workday is generally paid work time. Normal commuting from home to the first job is generally not, unless the employee must first report to the shop, load materials or do other required tasks. State rules can be stricter.

Are salaried technicians exempt from overtime?

Usually not. Exemption depends on job duties and a minimum salary level, and most field technicians are non-exempt, so they must receive overtime for hours over 40 in a workweek even when paid a salary or flat rate.