Database schema for timesheet app?
Your outline is exactly what you would want to do. If this was a real product the only addition I might add is that for the Timesheet table you would probably want your Clustered Index on the TimeStamp field as it sounds like one of the primary filters and you'll be selecting ranges from the table. If you are always searching by TimeStamp, Employee, and Employer key you can make the Clustered Index on all three.

A Clustered Index is the table itself on the disk, and it will be stored using the selected index as the logical sorting for the data. In most SQL servers when you create a Primary Key it automatically creates the Clustered Index on those columns, however it is not a requirement that they are the same columns (or even both need to be present) and can be on different columns. The primary reason to have the Clustered Index on other columns is to improve query performance on commonly searched data that is grouped by value or accessed via a range.

In general Indexing requires careful analysis of your queries to insure they benefit from all your indexing choices.