Field Time to Payroll: A Subcontractor's Workflow

Getting field time to payroll cleanly means capturing the same few facts at the source (worker, date, job, cost code, hours), having a foreman approve them on a fixed schedule, converting them to decimal hours, applying overtime rules to the whole workweek, and keeping the records. Do those five things in that order and payroll becomes a review step instead of a reconstruction project. Skip one and the office spends Monday chasing crews by text.

This guide is for commercial subcontractors in the United States who run crews across several jobs. It covers the workflow, the math, the federal rules that matter, and the errors we see most often.

TL;DR

• Capture worker, date, job, cost code, hours and approver in the field, once, and never retype it in the office.
• Convert minutes by dividing by 60: 8 hours 30 minutes is 8.50, not 8.30.
• Overtime under federal law is counted per workweek, not per job, so hours across all jobs must be added up before you pay.
• Rounding is allowed only if it averages out and does not always favor the employer.
• Keep payroll records at least three years and time cards two years, per the Department of Labor.

Table of Contents

• Why the handoff from field to office breaks
• The workflow, step by step
• What a field timesheet needs to include
• Converting hours and minutes to payroll hours
• Rounding: what the 7-minute rule really says
• Overtime math from field hours
• Errors to catch before you run payroll
• Keeping records that survive an audit
• Our perspective: payroll starts in the field
• Where Time Budge fits
• FAQ
• Sources

Why the handoff from field to office breaks

Most payroll mistakes on a subcontractor’s books are not math mistakes. They are handoff mistakes. A foreman writes hours on a paper card, a photo of it arrives by text on Friday, the office retypes it into a spreadsheet, and then someone retypes the totals into the payroll system. Every retype is a chance to drop a job code, swap two digits or lose a half hour.

There are three common failure points:

1. Capture. Hours are recorded from memory days later, without the job or cost code.
2. Approval. Nobody with knowledge of the work signs off before the office processes pay.
3. Transfer. Approved hours are copied by hand between tools.

The fix is a short, repeatable path with one owner at each step. The U.S. Department of Labor does not require a particular system: employers may use any complete and accurate timekeeping method, including time clocks, timekeepers or employee-written records. So the question is not which method is legal. It is which method reliably captures the facts and leaves an auditable trail.

The workflow, step by step

1. Capture time where the work happens

Have each worker or foreman record time on the day it is worked. Paper can work for a small crew, but it adds a transcription step. A phone-based timesheet removes that step, and if your jobs have poor coverage, an app that works without a signal matters. We cover that in our guide to offline time tracking for construction field teams and in our field-ready guide to mobile timesheets.

2. Code every entry to a job and cost code

Payroll only needs total hours. Job costing needs where those hours went. If you code at entry, one record feeds both. If you do not, someone has to guess later, and your labor actuals stop meaning anything. More on the fields below.

3. Let the foreman approve on a schedule

Pick a cutoff, for example end of shift Friday for the week, and require foreman approval before the office touches the entries. A foreman knows whether Maria really worked 10 hours on level three. The office does not. Our piece on mobile foreman timecard approvals shows how locking approved time keeps it from changing after the fact.

4. Review exceptions, not every line

The office should look at what is unusual: missing entries, hours over a set daily limit, workers near 40 hours, and entries with no cost code. Reviewing exceptions takes minutes. Rereading every card takes hours.

5. Convert, calculate and export

Once time is approved, convert to decimal hours, total by workweek, apply the overtime rule, and send to payroll. If your timekeeping tool exports in the format your payroll provider imports, this step is a file upload rather than typing.

6. Archive

Keep the approved records, including who approved and when. We come back to retention below.

What a field timesheet needs to include

A timesheet that works for both payroll and job costing carries the following. The first group is what the Department of Labor expects you to be able to show. The second group is what makes the data useful to you.

The federal recordkeeping list also includes hours worked each day and each workweek, the basis and rate of pay, overtime earnings, additions to and deductions from wages, total wages paid, and the pay period and payment date. Your payroll provider will usually generate most of that, but only if the hours it receives are right.

For more on building cards that hold up if someone questions them, see how to create subcontractor time cards that hold up and our construction timecard best practices.

Converting hours and minutes to payroll hours

Payroll systems multiply hours by a rate, so they want decimal hours. The conversion is simple: keep the whole hours and divide the minutes by 60.

Worked example. A crew member clocks in at 6:45 a.m. and out at 3:15 p.m., with a 30-minute unpaid lunch.

• Elapsed time: 8 hours 30 minutes.
• Minus the 30-minute lunch: 8 hours 0 minutes.
• Decimal hours: 8.00.

Now change the end to 3:37 p.m. Elapsed is 8 hours 52 minutes, less lunch is 8 hours 22 minutes. Divide 22 by 60 and you get 0.3667, so the payroll hours are 8.37 at two decimals. At $38.00 an hour, that is $318.06 rather than the $323.00 you would pay by mistakenly treating 8:22 as 8.22 hours’ worth of minutes in the wrong direction, or the $312.36 you would get by writing 8.22 as hours. The point: the number after the colon is minutes, the number after the decimal point is a fraction of an hour. They are never the same.

The most common slip is writing 8:30 as 8.30. That is 8 hours 18 minutes, so the worker is underpaid by 12 minutes. It stays hidden because whole-hour shifts come out right. Use two decimals at minimum, or four if your system allows, and let software do the conversion where you can.

Rounding: what the 7-minute rule really says

Many crews round punches to the nearest quarter hour. The common version is the so-called 7-minute rule: 1 to 7 minutes round down, 8 to 14 minutes round up to the nearest quarter hour. Federal regulation accepts rounding to the nearest 5 minutes, one-tenth or one-quarter of an hour, but only when it averages out so employees are fully paid for all time worked over a period. A policy that always rounds down fails that test and can create back-wage liability.

Practical guidance:

• If you do not need to round, do not. Paying to the minute is the simplest policy to defend.
• If you round, write the rule down, apply it to starts and stops neutrally, and test it on a month of real data to confirm it is not systematically costing workers time.
• Check your state rules too. Some states are stricter than federal law, and your payroll provider or employment attorney can tell you where you stand.

Overtime math from field hours

The federal baseline is straightforward: workers normally must receive time and one-half their regular rate after 40 hours in a 7-day workweek. Three details cause most of the trouble on subcontractor payrolls.

The workweek is the unit, not the job. A laborer who works 24 hours on Job A and 22 hours on Job B has 46 hours, and 6 are overtime. If each job’s card is processed separately, nobody sees it. Total by employee across all jobs before you calculate pay.

The regular rate is not always the base rate. Employers have been found in violation for leaving per diems or equipment rental payments out of the regular rate when they were not reimbursing actual expenses. If you pay a flat daily amount that is not tied to real costs, ask your payroll provider whether it belongs in the overtime calculation.

Different rates in one week. If a worker has two rates in a workweek, overtime is computed on a blended basis rather than on one of the rates alone. Confirm the method with your payroll provider or the Department of Labor before you automate it.

Worked example. A journeyman earns $40.00 an hour and works 44 hours in the workweek. Regular pay is 40 × $40.00 = $1,600.00. Overtime is 4 × $60.00 = $240.00. Gross is $1,840.00. To avoid surprises mid-week, our guide to field-first overtime tracking explains how to flag workers approaching 40 hours while there is still time to adjust the schedule.

If you also work on projects with prevailing wage requirements, the required rates and fringe handling come from the contract and the applicable wage determination, not from this article. Confirm with your payroll provider.

Errors to catch before you run payroll

Before every pay run, a ten-minute check catches most of what goes wrong:

• Missing entries. Compare the list of workers who were scheduled with the list who submitted time. Gaps usually mean an unsubmitted card, not a day off.
• Entries with no job or cost code. These pay correctly but wreck your job cost reports.
• Decimal and minute mix-ups. Look for entries ending in .30, .45 or .15 that were really meant as minutes.
• Workers over 40 across jobs. Run totals by employee, not by project.
• Unapproved time. Anything still pending after the cutoff goes to the foreman, not into the pay run.
• Unpaid break errors. A break deducted that was never taken, or never deducted, shifts a half hour either way.
• Edits after approval. Changes should be logged with who changed what and why.
• Wrong rate. New hires, promotions and trade changes are the usual sources.
• Travel and per diem coding. Treat these consistently so they land in the right line on the pay stub and in the regular rate when required.
• Duplicate entries. A foreman and a worker both submitting the same day is common when you are switching methods.

If the same errors repeat, treat that as a process problem. A short trial with one foreman, as we describe in one foreman pilot for crew time tracking, will show you where your own handoff breaks before you roll anything out company-wide.

Keeping records that survive an audit

The Department of Labor says covered employers should keep payroll records for at least three years, and supporting records for wage computations, such as time cards, for two years. Some states and contracts require longer, so use the longest period that applies to you.

A good retention habit has three parts. Store approved time in a system that keeps the original entry and every later edit. Keep the approval record with the entry. And make sure the records can be pulled by employee and by date range without a scavenger hunt. The same discipline applies on the schedule side: scheduling is easier when each trade’s start and finish are known, a point that coordinating flooring trades on schedule makes from the materials and installation angle.

Our perspective: payroll starts in the field

We built Won2Build from a working subcontractor’s point of view, and the lesson that shaped Time Budge is simple: payroll is only as good as the first entry. When a foreman has to remember hours at the end of the week, no payroll software can fix it. When the entry is made in the field, coded to the job, and approved before the office sees it, the office stops being a data entry department.

We also think subcontractors should not have to choose between payroll accuracy and job cost visibility. The same hour should feed both. That is why our tools share one login and pass data between them, so labor hours, change orders and bids are not retyped from one screen to another. Double entry is where margin leaks, because every copy is a chance to lose a number.

Our advice for a first step is modest: pick one crew, one foreman and two weeks, and compare their field entries against what actually got paid. The gaps you find are your real list of fixes.

— Jen Reese

Where Time Budge fits

Time Budge is our labor tracking app for subcontractors. Crews record time in the field, entries are coded to jobs, and the office sees them in real time. It is $199 per month per company, plus the $2 per month active field worker fee listed on our pricing page. There is a free trial before you subscribe, and you can use Time Budge on its own or with the other Won2Build tools under one login.

FAQ

How do you calculate time for payroll?

Subtract unpaid breaks from the elapsed time between start and stop, then convert minutes to a decimal by dividing by 60. Add the daily totals for the workweek, pay the first 40 hours at the regular rate, and pay hours beyond 40 at one and one-half times the regular rate. Your state may add daily overtime rules, so check them.

What is the 7-minute rounding rule?

It rounds punches to the nearest quarter hour: 1 to 7 minutes down, 8 to 14 minutes up. It is acceptable only when the rounding averages out over time. If it consistently shorts employees, it can violate federal wage law.

How long do I need to keep time cards?

The Department of Labor says payroll records should be kept at least three years and time cards at least two years. Your state or a contract may require longer, so keep time cards for the longest period that applies.

Do I need a time clock for field crews?

No. Federal guidance does not require a specific method, and time clocks are not required. What matters is that the records are complete, accurate and retained. Most subcontractors find a mobile timesheet with foreman approval easier than a physical clock on a moving job.

Sources

• Fact Sheet #21: Recordkeeping Requirements under the FLSA, U.S. Department of Labor
• Handy Reference Guide to the Fair Labor Standards Act, U.S. Department of Labor
• Day Laborers, U.S. Department of Labor
• Fact Sheet #53: Hours Worked, U.S. Department of Labor
• U.S. Department of Labor news release on overtime and the regular rate, 2021
• 29 CFR § 785.48, Use of time clocks
• Coordinate flooring trades on schedule

Recommended

• How to Create Subcontractor Time Cards That Hold Up
• Mobile Foreman Timecard Approvals That Lock Payroll for Construction
• Construction Timecard Best Practices for Subcontractors
• Certified Payroll for US Contractors: Map Field Time to WH-347