Time theft reportedly costs U.S. employers over $400 billion yearly in lost productivity. Further, in a survey by Software Advice, 43% of hourly workers admitted “to exaggerating the amount of time they work during their shifts.”

To prevent time theft, employers are utilizing biometric time clocks. According to the Software Advice survey, biometric time clocks seem to be the best way to prevent time theft, as only 3% of employees report stealing time via that method.

Biometric Time Clocks

A biometric time clock records an employee’s time based on biological identifiers that are unique to that employee. These identifiers may include:

Fingerprints.
Retina or iris scans.
Hand or face geometry scans.
Voiceprints.

Biometric time clocks eliminate “buddy punching,” which is a leading cause of time theft. “Buddy punching” is the term used to describe an employee clocking in or out for a co-worker. With a biometric time clock, this fraudulent scheme is a nonstarter.

Still, employers that utilize biometric time clocks should be aware of applicable laws.

Biometric Time Clock Laws

Several states — specifically, Illinois, Texas, Washington and New York — have enacted laws regarding the use of biometric information. Other states, including Arizona and Florida, have introduced legislation to regulate biometric data use.

The specifics of current and proposed laws vary. However, from an employment perspective, the laws generally require one or more of the following:

Employers must obtain employees’ consent before collecting their biometric data.
Employers must notify employees that their information is being collected and explain how the data is being applied.
Employers cannot sell, lease, trade or profit from employees’ biometric information.
Employers must abide by confidentiality, retention and disposal rules if the biometrics data is no longer needed.

Whereas the statutes for Illinois and Texas are broadly applicable to employers, Washington’s protections are limited to data stored for commercial (rather than employment) purposes. As noted by the law firm Littler, Washington’s “law does not apply to an employer’s use of a biometric time clock as part of a timekeeping system.” While employers in Washington are free to use biometric time clocks, they cannot sell or profit from the biometric data or include hand or face geometry scans as biometric identifiers.

New York’s biometric provision focuses primarily on fingerprinting. Employers in New York cannot require employees to use their fingerprint to clock in and out, nor can they take adverse action against employees who refuse to do so. Employers can, however, use a fingerprint biometric time clock on a voluntary basis. Moreover, they can use a biometric time clock that does not scan the surface of the hand or fingers.

Noncompliance Penalty

The state may impose penalties on employers that violate biometric data laws. For example, the penalty in Illinois ranges from $1,000 to $5,000 per violation plus attorney fees.

If you decide to implement a biometric timekeeping system, make sure you’re on legally sound ground.