The answer is 4: You must pay Howard, but you may discipline him. The burden to track an employee’s hours and pay them accordingly is on the company. Federal law states that the company is still responsible for paying the employee for any hours worked, even if the employee forgot to punch in/out. Further, if the company does not pay the employee, the employee has up to two years to make a wage claim under the federal Fair Labor Standards Act. If following proper timeclock procedures is required and detailed in your company policy, then you may consider having a discussion with the employee on the importance of following proper timeclock procedures and, if applicable, inform the employee of any possible disciplinary action for not following proper procedures.