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To expand on my question I have an employee that intends to "fight me" on the policy and states it is illegal, this information obtained from the internet. Furthermore she thought a co-worker had clocked her in and that too is against policy. However, I have no written policy handbook as I was advised a long time ago that nothing should be set in stone. I can assure you that all employees have been notified of these policies. For background I own a small business with approximately 45 employees.
The policy is not illegal, in fact the court would likely uphold your policy as a prudent business practice. To require the hourly employees the clock in is a reasonable and responsible policy. I must disagree with the advice you were given on whether to have a written policy handbook. As you can likely appreciate now, publishing your policies in the form of an employee handbook and requiring that each employee sign a statement signifying their understanding and acceptance of and agreement to adhere to such policies will summarily resolve issues such as this. The advice on not to have anything written in stone was probably offered by one who was of the opinion that a poorly written policy will do you more harm than no policy at all, which may be true. However, a well written policy would serve your business well.
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