Time tracking is used in many different professions to register working hours and overtime or as a basis for invoicing. Examples of professions that record hours are craftsmen, lawyers, cleaners, graphic designers, or consultants.
Both the Working Environment Act and the Bookkeeping Regulations state the requirements for time tracking.
The employer’s obligation to keep track of working hours:
The Working Environment Act § 10-7 requires that there must be an overview showing how much each employee has worked. The overview shall be available to the Labor Inspection Authority and to employee representatives.
In other words, the law requires employers to have an overview of how much each employee has worked, whether it concerns normal working hours, additional work or overtime.
The following information must be provided to the individual employee:
- Date of work done
- Number of hours on the relevant date
- Total hours for the period
Documentation requirement of time spent in service industries:
Pursuant to § 5-14 of the Bookkeeping Regulations, bookkeeping entities who perform services where the remuneration is based on time spent must document hours worked (time sheets or similar manual or electronic systems). For employees, this applies regardless of whether the salary is paid as hourly or fixed salary. The provisions also apply in cases where a fixed price has been agreed. The hours must be specified for each owner and employee per day, divided between internal time and individual customers/assignments. The documentation shall be prepared no later than the end of the following month. By internal time is meant hours spent on tasks that do not apply to customers or assignments.
In its statement dated 15.09.2010, the Directorate of Taxes has noted that the regulations do not impose specific formal requirements on the system chosen for time tracking, but the system must be designed so that checks can be carried out retrospectively. There is no requirement to document which work tasks have been performed on the individual assignment nor at which time during the day the work has been done on the assignment. It is only required to document how the hours of those working on assignments are distributed between the various assignments and internal time. The Directorate of Taxes assumes that it is sufficient for the employee to make a proper distribution of the time he or she has been at work during a day, whether this distribution is registered in an electronic system or in a manual system, such as time sheets/work lists for each employee. This distribution can be made continuously or at the end of the working day. The distribution may also take place at a later date, provided that the employee has a satisfactory system for keeping track of time spent until the hours are transferred to the final documentation no later than the end of the following month.
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