[Dave-B]

Most of my students show up late as well. However, it seems I take a different approach than the other comments.

Generally speaking I don't like to teach anything too serious and grammar related in the first hour of the day (My students have between 4-5 hours a day of class).

I normally read the newspaper in order to start vocabulary lessons or conversation. I like that it gets them warmed up for the day.

By the second hour, most students are there and my grammar lessons begin.

However, I would emphasize the ideas of the others that it is important to not stop class or make the punctual students feel like they are wasting time until everyone shows up. This is the key, and chatting and wasting time for 30 minutes certainly doesn't give anyone incentive to arrive on time.