Time tracking used to be a simple checkbox—something employers did to ensure workers got paid accurately. But as labor laws evolve and remote work becomes the norm, time tracking has become a compliance minefield.
Missed breaks? Misclassified employees? Inaccurate records? These aren’t small oversights anymore. They can lead to costly lawsuits, government audits, and damaged reputations.
With 2025 approaching, time tracking compliance is no longer optional. Labor laws—both in the U.S. and globally—are becoming more stringent, and regulators are cracking down on violations that were once overlooked.
For businesses that rely on remote teams, gig workers, and flexible schedules, staying compliant isn’t just about avoiding fines. It’s about protecting your bottom line, maintaining trust with your workforce, and preventing legal nightmares.
Here’s a breakdown of the time tracking laws you can’t afford to ignore in 2025—and how to stay on the right side of them.
Why time tracking compliance is more critical than ever
Workplace dynamics have shifted dramatically over the last few years. The rise of remote work, hybrid models, and flexible schedules has made accurate time tracking more complex—and more essential.
But regulators aren’t cutting companies any slack. Wage and hour lawsuits have skyrocketed, and government agencies like the U.S. Department of Labor (DOL) are taking a hard look at how businesses handle:
- Overtime pay for non-exempt employees
- Breaks and meal periods that are legally required
- Time rounding practices that could shortchange employees
- Off-the-clock work that goes unpaid
In 2025, compliance isn’t just about tracking hours. It’s about proving that you’re following the law—and having airtight records to back it up.
Key time tracking laws you can’t ignore in 2025
As we move into 2025, several laws and regulations are shaping how businesses track time. While many of these laws have existed for years, enforcement is ramping up, and penalties for non-compliance are becoming more severe.
Here’s what’s changing—and what you need to pay attention to.
1. FLSA overtime rules: new thresholds and exemptions
The Fair Labor Standards Act (FLSA) has long required employers to pay overtime (1.5x regular pay) for any hours worked over 40 in a workweek. But in 2025, expect significant changes to:
- Salary thresholds for exempt employees. The DOL is expected to raise the salary threshold for overtime exemptions, meaning more employees will be eligible for overtime pay.
- Misclassification audits. Improperly classifying employees as exempt (when they’re actually non-exempt) can lead to massive back pay claims and penalties.
How to stay compliant:
Review and update your classification of exempt vs. non-exempt employees.
Monitor overtime hours closely and ensure accurate recordkeeping.
Implement systems that automatically flag potential overtime violations.
2. State-specific time tracking requirements (especially in California and New York)
While federal laws set a baseline, state labor laws often go further—and failure to comply can lead to steep penalties.
In states like California and New York, employers face stricter rules around:
- Meal and rest breaks (with automatic penalties for missed breaks)
- Daily overtime calculations (not just weekly)
- Detailed recordkeeping for hours worked, breaks, and rate of pay
California, for example, requires non-exempt employees to take a 30-minute meal break by the 5th hour of work. If this break is missed or late, employers owe one hour of premium pay.
Beyond time tracking, compliance also extends to hiring practices. Businesses using background check software must ensure they follow fair hiring laws, especially when screening candidates in multiple states. Missteps in background checks—such as improper consent procedures or disregarding "ban-the-box" laws—can lead to legal exposure, just like time tracking violations.
How to stay compliant:
- Track time and breaks with precision—don’t rely on manual logs.
- Use alerts or notifications to remind employees of upcoming breaks.
- Regularly audit time records to identify and correct compliance gaps.
3. Mandatory tracking of remote and hybrid work hours
Remote and hybrid work is here to stay—but it’s created new compliance risks.
The DOL and state labor boards are becoming hyper-focused on ensuring remote employees are properly compensated for:
- Off-the-clock work (performing marketing tasks such as email verification and responding to messages, calls, or Slack messages outside work hours)
- Time spent prepping or closing out work that isn’t captured in standard time logs
- Breaks and overtime that often go untracked in remote setups
In 2025, expect stricter enforcement of time tracking policies for remote teams—and heavier penalties for failing to account for time accurately.
How to stay compliant:
- Use time tracking software like Unrubble that captures clock-ins, breaks, and clock-outs seamlessly.
- Educate remote employees about logging their hours accurately.
- Implement policies that set clear boundaries around work hours and off-the-clock tasks.
4. European Working Time Directive (for global teams)
If your company employs workers in Europe, the EU Working Time Directive (WTD) imposes strict rules around:
- Maximum weekly working hours (48-hour limit)
- Mandatory rest periods and breaks
- Accurate time recording requirements
In 2025, enforcement of the WTD is expected to tighten—particularly as remote work expands across borders. Employers who fail to comply face significant fines and legal challenges.
How to stay compliant:
- Track hours and breaks for EU-based employees in compliance with WTD requirements.
- Monitor overtime carefully and ensure that employees are taking required rest periods.
- Keep detailed records that can withstand audits by labor authorities.
5. Fair workweek laws (predictive scheduling in retail and hospitality)
Several U.S. cities and states have introduced fair workweek laws that require:
- Predictable schedules with advance notice of shift changes
- Compensation for last-minute schedule changes
- Accurate time records to prove compliance
These laws are already in effect in cities like New York, San Francisco, and Seattle—and by 2025, expect more cities to follow suit.
How to stay compliant:
- Use scheduling tools that provide real-time updates and ensure advance notice.
- Track shift changes and pay premiums when required.
- Maintain records that show compliance with predictive scheduling laws.
Common time tracking mistakes that lead to compliance violations
Even with good intentions, small errors in time tracking can create big problems.
Here are the most common compliance pitfalls to watch out for:
Rounding errors
Rounding time entries may seem harmless, but if done inconsistently—or in a way that shortchanges employees—it’s a compliance violation.
Best practice: Only round time within permissible limits (typically to the nearest 5 or 15 minutes) and ensure it doesn’t disadvantage the employee.
Misclassifying employees
Misclassifying employees as exempt to avoid overtime pay is one of the most common sources of wage and hour lawsuits.
Best practice: Review exemption criteria carefully and audit classifications regularly—especially when roles or responsibilities change.
Ignoring meal and rest breaks
Failing to properly track and compensate missed breaks—especially in states like California—can result in premium pay violations.
Best practice: Use automated break reminders and enforce strict policies to ensure compliance.
How to ensure time tracking compliance in 2025
With regulatory scrutiny increasing, manual time tracking isn’t enough anymore. To stay compliant in 2025, businesses need automated, audit-proof systems that:
Capture real-time data accurately
Use digital time tracking tools that log:
- Clock-ins and clock-outs
- Breaks and meal periods
- Overtime and off-the-clock work
Real-time tracking reduces the risk of manual errors and ensures compliance with evolving laws.
Implement geofencing for remote teams
For remote or hybrid workers, consider using geofencing technology to ensure employees are logging time accurately—wherever they are.
Geofencing can trigger automatic clock-ins and outs when employees enter or leave designated work zones, reducing the risk of off-the-clock work.
Maintain detailed audit trails
In the event of a compliance audit, proof matters.
Ensure that your time tracking system:
- Keeps detailed records of all time entries
- Stores historical data that can be retrieved easily
- Provides audit trails that demonstrate compliance
Conduct regular audits and training
Even the best systems can’t prevent errors if your team doesn’t understand the rules.
Conduct quarterly audits of time records and provide ongoing compliance training to managers and employees.
When employees know how to track time correctly—and understand the consequences of non-compliance—they’re more likely to follow the rules consistently.
Final thoughts: compliance isn’t a one-time fix
Time tracking compliance in 2025 isn’t a set-it-and-forget-it process.
Laws will change. Regulations will tighten. And employee expectations will evolve.
To stay compliant, businesses need to stay proactive.
- Monitor regulatory updates that affect your industry and regions.
- Review and update policies regularly to reflect new requirements.
- Invest in technology that ensures accurate, automated compliance.
Because when it comes to time tracking, staying ahead of the law isn’t just about avoiding fines. It’s about protecting your reputation, maintaining trust, and keeping your business running smoothly—no matter how the rules change.
