Did you know that rounding your employees’ timesheets, or time records, is legal?
Wait! Before you start rounding all of your employees’ timesheets down (analog or digital), finish reading.
According to the Department of Labor, timesheet rounding is an acceptable practice as long as it’s within certain criteria. An employer’s timesheet rounding can never be construed as favoring the employer over the employee.
What Are the Timesheet Rounding Rules?
There are three options when rounding an employee’s time:
- Rounding to the nearest 15-minute interval
- Rounding to the nearest 1/10th of an hour (essentially, every 6 minutes)
- Rounding to the nearest 5-minute interval
The most common option is to round to the nearest 15 minute interval, as paying for a quarter of an hour is often the easiest option for payroll systems. If you go this route, be aware that there are restrictions on when you can round up versus when you can round down (known as the 7 minute rule).
Under the 7-minute rule, you would:
- Round down to the nearest quarter hour if an employee is within the first 7 minutes of the interval
- Round up if to the nearest quarter hour if an employee is within the last 7 minutes of the interval
For example, if an employee punches in at 8:08, their time could be rounded to 8:15. If an employee punches in at 8:07, their time should be marked as 8:00.
Here’s a quick reference table to help out:
|0 – 7
||:00 (of the current hour)
|8 – 22
|23 – 37
|38 – 52
|53 – 59
||:00 (of the next hour)
Can Rounding Time Save Me Money?
The Department of Labor allows for timesheet rounding “where there are uncertain and indefinite periods of time involved, a few seconds or minutes in duration, and where the failure to count such time is justified by
industrial realities.” In plain speak, this means it’s meant to allow for some measure of inconsistency with time tracking methods.
What’s important to note here is that, as in almostall cases, the FLSA will most often rule in favor of the employee—this rule is not meant to allow businesses to take paid time away from employees.
Ultimately, employers shouldn’t turn to time record rounding simply to cut costs. If you’re saving significant amounts of money with this practice, you’re almost definitely doing it illegally – and therefore opening yourself up to FLSA lawsuits.
Use one of these three different approaches to ensure you’re staying compliant with rounding rules:
- Always round to the 5-, 6, or 15 minute increment (using the same increment each time)
- Round both clock in and clock out times down to the nearest increment
- Round all entries in favor of the employee (round down for clock ins and up for clock outs)
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