Why is it more profitable for an employer when an employee is late for work rather than arriving early?

Short answer: Employers avoid paying for unproductive early time.

Full answer: When employees clock in early before their scheduled shift, employers might need to pay for that additional time, even if it isn't productive. According to the Fair Labor Standards Act (FLSA), any time an employee is on the clock must be compensated if they are engaged in work-related activities. Conversely, if an employee arrives late, employers can legally deduct that time from their wages without compensation.
This results in a scenario in which arriving late incur lower costs than arriving early, potentially leading to considerable unproductive payroll expenses over time.

For example: “If an employee clocks in 15 minutes early each day, this adds up to 1.25 extra hours per week. If 10 employees do this, it results in 12.5 hours of additional paid time weekly, even if no productive work is done.” Implementing policies that prevent early clock-ins without approval can help minimize these costs.

Legal Considerations: Employers must comply with FLSA rules by compensating employees for all times they are clocked in and working, even before the scheduled start time. Simply deleting early clock-ins without pay can lead to wage violations and penalties.

Warning: Avoid Common Mistakes: Do not create an environment where employees feel pressured to work off the clock to avoid being marked late. Clear policies and timekeeping controls can help manage early and late arrivals reasonably.

General federal norm: Fair Labor Standards Act (FLSA); U.S. Department of Labor guidelines
State: All States
Link to legislative resource: U.S. Department of Labor (DOL)