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![]() ![]() It involves rounding up or down to the nearest quarter-hour. 15-minute roundingįifteen-minute rounding is the most common form of time clock rounding. To remain legally compliant in your rounding, you must follow one of the three FLSA-approved rounding rules: 1. Not use rounding to withhold wages that an employee has fully legally earnedĭid you know? Time clock rounding is legally compliant if you round to certain fractions of an hour and avoid rounding in ways that unfairly diminish employee pay.Round only to certain fractions of an hour.According to the federal Fair Labor and Standards Act (FLSA), employers who round time clocks must Within certain bounds, time clock rounding is entirely legal. Key takeaway: Time clock rounding is important for easing your payroll calculations and potentially combating employee time theft. However, this nickel and diming is a less-compelling reason for rounding time clocks than easing your payroll calculations, as trying to not pay for breaks borders on micromanagement. If an employee has worked eight hours and two minutes, rounding down to eight hours helps you regain some of the money lost to short employee breaks during paid work time. Time clock rounding can also combat time theft and other forms of paying employees for work they haven’t done. ![]() If you just round the time worked up to eight hours, you can simply calculate $15 x 8 = $120, and the 50-cent difference is minimal. If you pay an employee $15 per hour and they work seven hours and 58 minutes, then you will need to pay them $15 x 7 + $15 x (58/60) = $119.50. An example can show how time clock rounding makes payroll easier. Though not required under any employer laws, time clock rounding can help streamline your payroll processes. Many employers do so without ever realizing that time clock rounding is a formal concept with legal ramifications.Įditor’s note: Looking for the right time and attendance systems for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs. and clocks out at 4:59 p.m., you might round their start time to 9 a.m. For example, if an employee clocks in at 9:02 a.m. Time clock rounding is the rounding up or down of an employee’s hours worked. It may also be less effective in recouping lost wages than you might think. Some employers have turned to time clock rounding to counter this revenue loss, but this practice can present legal issues if it’s not done properly. According to the American Society of Employers, 20% of all employer revenue is lost to employee time theft. For example, if an employee adds five minutes of extra time to their sheet each day, you will pay them for more than 20 hours of unpaid work. While having an employee who adds a few minutes to their timesheet each day might not seem like a huge deal, it can have a big impact on your bottom line.
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