There is an option to mark your employees late or absent in your timesheets. This is accomplished by clicking the edit button within a timesheet > then Staff List which brings you to an area where you will be able to see who took a lunch or not, who was late as well as who was absent (and make changes).
It is important to mark employees as late and absent when it happens as you have the ability to run an "Employee Attendance Report" (under payroll/staff in reports)". This is essential in order to keep track of how often as well as why an employee is not at work.
When you set someone to late they are still paid for their clock in. It is for your record keeping because if an employee is frequently late or absent you may want to apply discipline or look further into why it is happening in order to improve business efficiency.