Small Business

Are timesheets a legal requirement in the UK?

Understand your obligations when it comes to tracking employee time...
Sean QuinnPosted on Friday, July 22nd 2022

If you employ people in your small business, you might be wondering what your obligations are when it comes to tracking the hours your employees work (and their breaks) and what the UK law says about timesheets. There are regulations to bear in mind including the Working Time Directive and National Living Wage rules - but we're here to make it simple, and help you keep on top of your time-tracking responsibilities.

What are the rules on time worked and wages?

It's worth mentioning that most rules are set with 'normal' businesses in mind - some directives don't apply in the same way to some industries, such as emergency services, adult domestic servants and lorry drivers. If you're not part of a special industry though, you're likely covered by the normal rules on working time and pay.

The most important legislation that covers employees' working time is the Working Time Directive. This law states that an employee can't work more than 48 hours a week, unless they've expressly opted out. Usually, this would be worked out as an average over a 17 week period, but again there are certain exceptions for some industries, and you can agree with your employees to extend this period up to 52 weeks.

'Work' in this case might mean more than you think. Not all 'working time' is just time spent being productive on tasks; working hours also include work-related training, travelling between different sites, and working lunches.

Can you work more than 48 hours a week in two jobs?

The 48 hour limit applies per person, no matter how many jobs they have - so even if your employee works well below the 48 hour limit for your business, you'll need to ensure they don't exceed the limit by working another job.

If your employees undertake night work, you'll also need to ensure that they don't work more than 8 hours on average in a 24 hour period.

Employees working for more than 6 hours are entitled to at least a 20 minute rest break, and at least 11 hours of uninterupted break between two working days. Whether you pay your employees for these breaks, or give additional breaks, is up to you.

What is the minimum wage in the UK?

As well as limits on working time, as an employer you're also bound by the law on wages. The minimum wage varies by age, and changes each year, so it's best to check the most recent rate to ensure you're compliant.

For employees that work hourly, ensuring you pay the National Living Wage or National Minimum Wage for their hours worked should involve some pretty straightforward multiplication.

For employees who are paid a monthly salary, you'll also need to ensure their pay per hour doesn't drop below the National Living Wage or National Minimum Wage. Their employment contract should set out the basic number of hours they're expected to work - and any extra hours must be paid at or above the minimum wage.

Employers in the UK have a legal obligation to keep track of their employee's hours worked, overtime and time off, to ensure they are not working too many hours, and are paid above the minimum wage rate for their time.

If you fail to do either of these things, the legal repercussions can be huge. You'll need to keep a clear and indisputable record of the hours your employees work (and proof they have opted-out of the 48 hour a week limit, if applicable).

Since April 2021, you must keep proof that you're paying above the minimum wage for at least 6 years. In order to calculate their average wage, you'll need a record of employee's pay, their hours worked and holidays - in other words, the information you'd find on your employee's timesheet.

Are timesheets subject to GDPR?

As your employee's timesheets and payroll information can be used to identify them, you'll also be bound by the Data Protection Act 2018. This means you must have a lawful basis for holding and processing the data, and must do everything within your control to ensure no unauthorised persons can access your employee's personal data.

With this in mind, you may want to consider whether it's more secure to store this data in physical form on your business premises, or encrypted in the cloud. With timesheet software such as TimeKeeper, you're able to set different levels of access, for example only allowing managers to view data for the employees they manage. Once your data retention period has passed, you can delete employees entirely from your system to ensure no personal data is being kept unneccesarily.

The bottom line

The requirements for businesses can be complicated, and getting things wrong can cause you serious legal issues. Digital timesheet software which keeps track of your employees hours worked, breaks and absences can assist you in staying on the right side of the law, and gives you a clear record for proof should disputes ever arise.

The information provided here is intended as a guide only and is our best interpretation of current legislation. This does not constitute legal or financial advice; consult with a legal or financial professional for advice on your business' specific situation.

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