Yes, time zones can be set at the employee level. You will find the default time zone setting at the account level, this is used as the default for new employees. Visit "Settings --> Account Settings" to set the default.

To set time zones on a specific employee visit the "Employees" tab and click on "View" next to the employee's name. Then click on "Edit," one of the options is a drop down for time zone. Daylight savings time is automatic if the time zone selected uses it.

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