Some of Australia's biggest retailers and manufacturers are rolling out state of the art fingerprint scanning technology to record employees' clock in and out times.

The PeopleKey system registers the start and finishing times of up to 32,000 employees using US Government-certified fingerprint algorithms, and the data is sent to HR and payroll for processing.

Dan Murphy's, Breville, Unomedical and NSW RailCorp are among those using a fingerprint system, and a spokesperson from Dan Murphy's told the Victorian Chamber of Commerce that the system was not designed to penalise one-off occurrences of lateness, but serial offenders.

"Dan Murphy's has found electronic clocking in and out to be a reliable method of recording staff hours, as well as enabling store managers to know which team members are on site for health and safety purposes," the spokesperson said.

"Staff who are significantly late may have the time deducted from their pay or, at the manager's discretion, can choose to make up the time,"the spokesperson added.

A fingerprint system will also be rolled out at RailCorp by mid-2012, and a spokesperson said the organisation will introduce an electronic time capture and payment process for all employees.

RailCorp said the initiative will streamline and simplify their time and attendance record keeping, eventually eliminating the need for staff to manually record their time at work on paper timesheets or in attendance books.

"This will result in reduced administration requirements and more accurate payments to staff," a spokesperson said.

The scanners have been extensively used in the US for some time, and there has been issues raised with regards to employees' privacy. However, RailCorp said the data they receive will be in the form of mathematical algorithms, not fingerprint images.

Frank Bruce from PeopleKey said many Australian businesses are choosing to implement the technology to stamp out "buddy punching" - when workmates clock on for others.

Bruce added that there have been cases where businesses have saved $100,000 by using a fingerprint system.