5 time tracking mistakes that can cost your business a fine

Time tracking has been mandatory in Spain since 2019. Most businesses know this. But knowing and doing it properly are very different things. Many SMEs make mistakes that leave them just as exposed as having no records at all — or worse, because they believe they’re compliant when they’re not.

Here are the 5 most common mistakes we see in real businesses, along with a recent court case that shows what happens when time tracking goes wrong.

The case that explains everything

In January 2026, the High Court of Justice of the Basque Country ordered a restaurant in Bizkaia to pay €3,311.70 plus 10% interest for unrecorded overtime. The company had a time-clocking system, but the employee “refused to clock in” and in the kitchen “no individual tracking was kept”.

The outcome? The court applied the reversal of the burden of proof: without valid records, it was the company that had to prove overtime hadn’t occurred. It couldn’t. And it lost.

This case brings together several of the mistakes we’re about to look at.

Mistake 1: Having a time-clocking system but not ensuring it’s actually used

This is exactly what happened in the Bizkaia case. The company argued the employee was registered in the system but refused to clock in. The court didn’t accept this as a defence.

The law is clear: it’s the employer who must “guarantee” the time record (art. 34.9 of the Workers’ Statute). Making a tool available isn’t enough. If an employee doesn’t clock in, that’s on you.

What to do? Have a written clocking incident protocol. If someone doesn’t clock in, there must be a record of it: a formal email warning, internal notification — whatever it takes, but documented. In a recent case in Catalonia, the company won precisely because it had documented the warnings sent to the employee who wasn’t clocking in. A system with automatic alerts helps enormously too.

Mistake 2: Recording only start and end times (no breaks)

Many companies record the time of arrival and departure, then automatically deduct 30 or 60 minutes for breaks. Seems reasonable, but it’s not enough.

The draft of the new Royal Decree requires breaks to be recorded in a “personal, direct and immediate” manner. An automatic deduction doesn’t meet this standard. And during an inspection, a record without detailed breaks raises questions about actual working hours.

The solution is having employees clock each break (start and end). Define break types (lunch, rest, personal) and whether they count as working time. If you’re already using automatic deductions, at least supplement them with a system that allows real break recording.

Mistake 3: Not keeping records for 4 years

Article 34.9 of the Workers’ Statute is unambiguous: records must be kept for 4 years and be available to employees, their representatives, and the Labour Inspectorate.

Many companies delete records when switching systems. Others use paper sheets that get lost, or simply don’t make backups. When the Inspectorate asks for records from 3 years ago and you don’t have them, that’s a direct infringement. The penalties: from €751 to €7,500.

A cloud-based digital system solves this automatically. That said, check your provider guarantees retention for at least 4 years, and if you switch systems, export your old data before migrating.

Mistake 4: Using a system employees can’t access

The law states that records must be “available to workers”. If your system only allows administrator access and employees have to email you to get their own records, you’re not compliant. And in a dispute, an employee who could never view their records has an extra argument to challenge them.

Every employee should be able to check their history from their phone or any browser, without depending on anyone. Added bonus: when employees can see in real time what’s being recorded, there are fewer disputes later.

Mistake 5: Relying on “informal arrangements”

In the Bizkaia case, the company claimed that “rest days and time off were organised among the workers themselves”. The court gave this argument no weight whatsoever.

SMEs, particularly in hospitality and retail, run on verbal agreements. “You leave early today and I’ll cover tomorrow.” As long as nobody complains, everything’s fine. But the day an inspection arrives or an employee goes to court, there’s nothing to show.

Flexible scheduling isn’t incompatible with time tracking — it just needs to be digitalised. Shift swaps, cover arrangements, compensations: everything should be recorded. If one employee covers for another, both clock their actual hours.

Summary: mistakes and consequences

1. System available but not effectively used

• ⚖️ Risk: Reversal of burden of proof
• 💥 Consequence: Overtime ruling (Bizkaia case: €3,311)

2. Only start/end times, no breaks

• ⚖️ Risk: Non-compliance with the upcoming Royal Decree
• 💥 Consequence: Penalty at inspection

3. Not keeping records for 4 years

• ⚖️ Risk: Serious infringement of art. 34.9 WS
• 💥 Consequence: Fine from €751 to €7,500

4. Employee has no access to their records

• ⚖️ Risk: Non-compliance with art. 34.9 WS
• 💥 Consequence: Records challengeable in court

5. Informal arrangements without documentation

• ⚖️ Risk: No evidential value
• 💥 Consequence: Complete defencelessness against claims

How to tell if your business is at risk

Ask yourself these questions:

1. ✅ Do all employees clock in every day? (Not just most of them)
2. ✅ Does your system record breaks as well as start and end times?
3. ✅ Are records from 3 years ago accessible right now?
4. ✅ Can each employee check their own records without asking permission?
5. ✅ Are shift swaps and compensations documented?

If you answered “no” to any of these, you have a vulnerability.

The solution doesn’t have to be complicated

You don’t need an expensive or complex system. You need one that:

• Ensures everyone clocks in (alerts, kiosk mode, mobile app)
• Records individual breaks
• Retains data automatically for 4+ years
• Gives employees access to their own records
• Documents any incidents or changes

With Cleverfy you can have all of this running in under 5 minutes, from €1.50/user per month. No contracts, no lock-in.

👉 Try Cleverfy free for 14 days — no credit card required.

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Sources: STSJ PV 242/2026 (ECLI:ES:TSJPV:2026:242), art. 34.9 of the Workers’ Statute

Legal disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified professional for your specific situation.