From the time of
cheap labor when daily wages became prevalent, a record of the units of
time put in by the employee became a business necessity. When labor was
available at a dollar a day and the work day was measured from sunrise to
sunset, hours had little meaning or value. Labor (employees) got the
"breaks" in the winter when the days were short. Capital
(employers) got the "breaks" in the summer. Wages due were
figured according to the number of days an employee was on the job. Even
with these simple methods of accounting for payroll time, arguments were
not unknown. Employers, being human, occasionally forgot to tally up a day
for some employees. At times employees would also forget that they had
missed a day for personal reasons.
conditions the money value of an hour of labor has greatly exceeded that
of a whole day in former times. A smaller unit of time has become
essential for accounting purposes and emphasis has been given not only to
the importance of the hour, but also to the money value of the minute.
Within recent years,
still greater importance has been attached to machine-made (time clock)
payroll records by the widespread introduction of special benefits for
employees. Bonuses for prompt and regular attendance obviously demand
fair, impartial, and impersonal decisions regarding the punctuality or
tardiness of those eligible to participate. The payment of compensation
for time lost because of injuries suffered in the line of duty demands
indisputable evidence that the individual was on duty at the time of the
injury. These and similar benefits for employees are predicated, in the
final analysis, on accurate records of time. What can be more accurate
than records made by the employee himself when he mechanically records his
time of arrival and departure by using a time clock?
Employers who have
for years considered time clock payroll records indispensable for their
internal accounting are today finding such records of inestimable value in
furnishing state and federal agencies the records and reports that have
become mandatory as the result of Social Security legislation. Federal and
State unemployment insurance are computed on the basis of payroll figures.
The minimum wage and maximum hour laws make it mandatory that the employer
have accurate, indisputable records of hours worked and wages paid for
proof of compliance.
competitive market, job cost or labor records are a necessity. The cost of
every marketable product, whether purchased or manufactured, is comprised
of three basic elements: the cost of labor, material, and overhead . Some
form of labor record is necessary in order to incorporate this element
into the general accounts. Labor records today are designed to meet the
requirements of cost accounting as well as general accounting. Cost
accounting differs from general accounting in that it reveals the profit
or loss on each unit or line of product, while general accounting
discloses the profit or loss of the business as a whole.
Costs are divided
into direct and indirect costs. Direct costs are those covering materials
and labor expended directly upon the product in some state of its
progress. Indirect costs are those that cannot be charged directly to it.
They also include those costs that are capitalized, such as tool and plant
It follows that
labor is also classified as direct and indirect. Jobs such as those of
supervisors, clerical personnel, cleaners, and maintenance are examples of
An employer buys
time, as measured by the attendance time recorder, in wholesale lots. Each
pay period he buys so many working days of time from his employees. He
must pay for all of the working days of time that his employees deliver to
him during scheduled working hours. It is up to the employer to see that
the employee produces while on the job. It is necessary that the employer
know what each of his employees accomplished during each working day. The
employer must have an adequate idea as to the amount of productive time
purchased from his employees. The employer's only chance of reimbursement
is to resell the time bought in wholesale lots as services or products.
In the manufacturing
field, the struggle to keep production costs down has resulted in
innumerable incentive plans for increasing units of production per unit of
time. Regardless as to the plan or procedure, time and measurement of time
is a vital factor.
The need to record
employee time continues today. After all...time is still money. From the
simple time recorder to the computer based data collection system,
Peninsula Time Clock Inc. offers a complete line of products designed and
built to control one of your company's major expenses - TIME.