This audio is automatically generated. Please let us know if you have any comments.
Editor’s note: Nic De Bonis is CEO and co-founder of workforce management software provider Workyard. The opinions are the author’s own.
I’ve had enough contractor conversations to notice when an industry has a blind spot. This is one of them.
Contractors run lean operations. They fix the prices of the jobs up to the hour, know their material costs and observe the margin of each offer. What most of them never stop to think about is whether their time records might hold up in a deposition two years from now.
This is the gap. Inaccurate time records aren’t just a payroll inconvenience. For most contractors, they are an invisible compliance liability, one that remains invisible until a former employee files a claim and records can answer the question.
The wrong problem
Nic De Bonis
Courtesy of Workyard
In sales conversations with more than 180 mid-market construction contractors, nearly half came to us focused on payroll efficiency or workforce visibility. They talk about time sheets arriving late, foremen checking in the entire crew without checking anyone, hours that didn’t match what the superintendent remembered. These are real problems, no doubt.
But only 4% cited compliance or legal exposure as a reason for talking to us.
Of the contractors who tracked time on paper or spreadsheets, 72% never brought up a compliance issue once in conversation. I don’t think they are scornful. It just hadn’t occurred to them that their records might not hold up if challenged.
They were managing the risk they could see and completely missing what they couldn’t.
Why this risk is different
Most construction compliance failures require an actual mistake. Security breaches, misclassification, and prevailing wage gaps all imply that something has gone wrong. Fix the bug, fix the problem.
Record keeping doesn’t work like that.
A contractor can pay every worker accurately, at the right rate, and on time, and still lose a wage claim because the records to prove it aren’t kept.
Under the Fair Labor Standards Act, workers have two years to present (three if it is considered a willful infringement). When a claim arrives, the employer must rebuild all relevant shifts. This is difficult with just a paper login sheet and just as difficult with an Excel file with no change history. The memory of a foreman against that of a former worker? This is not a test.
Mathematical compounds. Workers can claim back wages plus an equal amount in liquidated damages, meaning a $50,000 overtime dispute turns into $100,000 before attorney fees.
The Department of Labor’s Wage and Hour Division recovered more than 259 million dollars in back wages for nearly 177,000 workers by fiscal year 2025. In the construction sector specifically, an enforcement push produced more than 3,000 investigations in a single year and $36 million recovered for 21,000 workers. The most frequently detected violations were overtime calculation errors, uncompensated travel time and undocumented breaks.
These are registry errors, not intentional errors.
One thing most contractors don’t realize until they’re there: the legal system doesn’t evaluate whether you’ve paid correctly, it evaluates whether you can prove it. They are two different standards, but the industry is only ready for one of them.
What contractors say after the fact
The conversations that get me are not the ones about efficiency. They are those where a contractor describes a situation they did not see coming.
A contractor ended up in a lawsuit over a worker’s claim that he never got a lunch break. There was nothing in the records to the contrary.
Another, after learning of similar claims, said he also had no way of proving his crews had taken their breaks.
A third described their standard daily process: Supervisors collected signatures at the start of the shift, but rest periods and exits went undocumented. Nothing in writing confirmed what actually happened between check-in and check-out.
Each of these contractors kept track of time. None of them had records that were kept when they were tested.
The rethinking that the industry needs
Contractors who come from intact wage claims share one trait: They treated time records as legal documents before anyone asked them to. They deliberately have time-stamped entries, break confirmations that workers start, or a record of who changed what and when.
I understand why this rethinking is difficult.
Time tracking is introduced to contractors as a payroll tool, making payroll execution faster. This framing is accurate, but a lawyer or DOL investigator does not consider time records to be a payroll artifact. They look at them as proof.
The good news is that solving this doesn’t require reinventing the way you run a job. The best time tracking systems handle the problem of legal records quietly in the background without adding much to a foreman’s daily routine.
Systems that do this well share three characteristics:
- Workers come in and out with a sign confirming that breaks have been taken.
- GPS provides a secondary layer of accuracy that doesn’t depend on anyone’s memory.
- Each time a card change is automatically recorded with a weekly approval before payroll is run.
These three things together create a record that holds up. No dramatic changes are needed, just a documentation standard that finally matches what the legal system actually requires without placing a huge burden on your crew.
