Yes.  When you check-in to the event (usually the day before), you are given a timing chip attached to a Velcro band to be worn around your ankle (usually the left so that it does not interfere with the drive-train on your bike).  There is a sensor at the beginning of the swim so when you cross the start line, no matter how far back your wave starts, the clock will only begin counting your time once you pass that line.  You will pass many more sensors along the course, but only the one at the finish line will stop the time from counting.  Everything that happens from the start line and finish line counts towards your overall time.