Time tracking requirements for federal contracts

Everhour supports approved timesheets and billing review, while federal contract work requires cost-objective records and audit-ready support.

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Labor records for federal contract work

Build contract-ready time records

Federal contractors use time records to support labor charged to a contract, cost-reimbursement voucher, progress payment, or covered service and construction payroll record. The record needs more than a weekly total. It should show the employee, date, hours worked, project or contract, labor category when used, and the cost objective that receives the labor cost.

For covered nonexempt employees under the FLSA minimum wage or overtime provisions, employer records must include hours worked each workday and total hours worked each workweek. Federal contract work adds another layer when costs must be allocable to a contract. A timesheet for an engineer, analyst, guard, or field technician should make the contract connection clear before payroll, billing, or reimbursement review begins.

Separate direct and indirect labor

DCAA's pre-award accounting system checklist asks whether the accounting system identifies employee labor by intermediate or final cost objectives and charges direct and indirect labor to the appropriate cost objectives. Direct labor belongs to a specific contract or task. Indirect labor belongs to overhead, general and administrative work, training, or another indirect pool defined by the contractor's accounting system.

A useful weekly record keeps that split visible. For example, a project manager may record 32 hours to Contract A, 4 hours to proposal support, and 4 hours to internal administration. The time record should feed labor distribution without forcing someone to rebuild the week from notes, calendar blocks, or chat history after the fact.

Keep overtime and support aligned

Federal overtime under the FLSA applies after 40 hours in a fixed 168-hour workweek for covered nonexempt employees, at not less than one and one-half times the regular rate of pay. Hours cannot be averaged across two or more workweeks for FLSA overtime purposes. The FLSA also does not require premium pay solely for Saturday, Sunday, holiday, or regular rest-day work unless the weekly overtime rule is triggered or another law or agreement applies.

Covered federal service and construction contracts can add CWHSSA obligations. For covered contracts, laborers and mechanics, including watchpersons and guards, must receive at least one and one-half times their basic rate of pay for hours worked over 40 in a workweek. A contractor should keep the weekly threshold, worker category, contract coverage, and policy or contract exceptions visible during review.

Use a workflow for approvals

A one-off time sheet can be enough for a small correction, a single invoice backup, or a short internal reconciliation. It works when the reviewer only needs a complete weekly view, signed support, and a clear connection between hours and the cost objective. The record still needs to be accurate, complete, and preserved for the applicable period.

A managed workflow becomes necessary when tracked time feeds payroll, cost postings, vouchers, or client billing every pay period. Everhour Timesheets collect weekly project hours and working hours by person, then let users submit time for approval. Admins can approve, reject, partially approve, and lock entries before the records move into billing, payroll review, or contract-cost support.

This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.

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Frequently Asked Questions

Do federal contracts require a specific time clock system?

Federal contract rules do not impose one universal clock-in system. The FLSA requires covered employers to keep accurate records for nonexempt workers, and DCAA's checklist focuses on whether labor is identified by cost objective and distributed correctly. A paper, spreadsheet, or software system can work when it creates complete, accurate, and auditable records.

Which time fields matter most for contract cost support?

The critical fields are employee, date, daily hours, weekly hours, contract or project, cost objective, and direct or indirect labor classification. Cost-reimbursement and similar work also needs records that support claimed allowable costs under FAR 31.201-2. Inadequately supported claimed costs may be disallowed.

How long should federal contract time records be kept?

FLSA rules require payroll records for at least three years and basic time and earnings records for at least two years. FAR 4.703 generally requires contractors to make contract records and supporting evidence available for three years after final payment, with specified longer or shorter periods for certain records and circumstances.

Which overtime rule applies to covered federal service and construction contracts?

CWHSSA requires laborers and mechanics, including watchpersons and guards, on covered federal service and construction contracts to receive at least one and one-half times their basic rate of pay for hours worked over 40 in a workweek. FLSA overtime for covered nonexempt employees also uses a weekly threshold over 40 hours.

Which mistake weakens federal contract time support?

The common mistake is recording total hours without tying labor to the correct cost objective. DCAA's checklist looks for labor by intermediate or final cost objective, a labor distribution system, and separation of direct and indirect costs. A clean weekly total still fails review when the contract, indirect pool, or allocation path is unclear.

How does Everhour Timesheets support federal contract time review?

Everhour Timesheets collect weekly project hours and working hours by person, so managers can review entries before payroll, billing, or reporting. Users submit time for approval, and admins can approve, reject, partially approve, and lock entries once the weekly record is ready.

How does Everhour help preserve exportable time records?

Everhour supports exports for reports, team timesheets, and full team logs, giving owners usable files for review or archive needs. Those exports can support billing and payroll checks when the team has already tracked time against the right project and task structure.

Move from timesheets to approvals

Use Everhour Timesheets to collect weekly contract hours, approve or correct entries, and lock reviewed time before it supports billing, payroll review, or contract-cost reporting.

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