What to Know About Rounding Employee Hours
To ensure your company is falling within the approved practices for rounding employee hours, it’s important to ask not only what the best practices are, but also, what practices are viewed as lawful. While it is standard and even routine for workplaces to implement some form of time rounding in tracking employee time and attendance, regulations from the Fair Labor Standards Act (FLSA) mandate that employers abide by a strict set of terms to ensure employees are compensated for all the time they actually work.
“In some industries, particularly where time clocks are used, there has been the practice for many years of recording the employee’s starting and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, these arrangements average out so that the all of the time actually worked by the employee is properly counted and the employee is fully compensated for all the time actually worked.”
The Department of Labor explains in an instance in which an employer rounds to the nearest fifteen minutes,
“Some employers track employee hours worked in 15 minute increments, and the FLSA allows an employer to round employee time to the nearest quarter hour. However, an employer may violate the FLSA minimum wage and overtime pay requirements if the employer always rounds down. Employee time from 1 to 7 minutes may be rounded down, and thus not counted as hours worked, but employee time from 8 to 14 minutes must be rounded up and counted as a quarter hour of work time.”
(In cases where a collective bargaining agreement or union agreement exist, rounding rules are usually included and will supersede company preferences in their application.) While arrangements can vary, the most common rounding arrangements fall under three approaches – rounding each punch, per total hours for every pair of punches, and per total hours for the whole day.
- Rounding Each Punch: Each punch is rounded individually. For example, with a fifteen-minute rounding rule, if an employee punches into work at 9:04 they are recorded as punching in at 9:00. An employee punching out of work at 1:06 is recorded as punching out at 1:00.
- Rounding Total Hours Per Pair: Employers rounding “per pair” take two punch times and rounds the period of time between the two. For instance, with a five-minute rounding rule, if an employee goes to lunch at 1:08 and returns at 1:56, their 48 minutes off the clock will be rounded as 50 minutes.
- Rounding Per Total Hours for the Whole Day: Employers rounding per total add up all the hours worked during the day and round that figure to create a total per day. If an employee is clocked as working 8 hours and eleven minutes, in a fifteen-minute rounding, that figure will be recorded as 8 hours and fifteen minutes.
Regardless, all these arrangements are acceptable as long as punch times are rounded to the closest possible increment, regardless of whether or not conditions are favorable to the employer. In fact, fair rounding inevitably creates a balance between the employer and employees that matches and mirrors real life. Rounded times may give employees the benefit of the doubt and record them as arriving earlier than they did, or leaving later than they did. Likewise, rounded times may also dock employees a few minutes pay, depending on the time they punch in or out.
While auto-deduction can take care of many of the cumbersome nuances of time attendance, the element of human decision making is still a necessity. For instance, how should you treat an employee who punches in during the middle of a rounding period? If a company rounds time by the nearest 30 minutes, an employee punching in at 1:15 can be judged two entirely different ways, either to 1:00 or to 1:30.
If you are using Fingercheck you can determine how your company will round employee hours, devise your own strategy on how to treat specific circumstances, and implement your own policies to address inconsistencies in time tracking. Using our rounding tool, administrators can round even numbers up or down, and set punch times to be rounded per punch or per total hours (per pair and per day).
Take for instance, an organization that rounds per total hours for the whole day, and rounds to the nearest ten minutes. If an employee works a total of 7 hours and 25 minutes, by all logic, the hours worked can be rounded 7 hours and 20 minutes or 7 hours and 30 minutes. Both options would be legitimate; the decision comes down to personal preference.
Fingercheck prides itself on providing employers with the tools to customize their time attendance to a degree that is unparalleled by competitors in the industry, and are excited for our clients to start using our new time rounding feature. If you need help setting this up on Fingercheck, click here to learn how to set up rounding rules.
Call us today to get started with your free 30-day free trial of FingerCheck. For more information, visit us at FingerCheck.com or call us at 1-800-610-9501.
*FingerCheck advises all organizations check their time rules with legal counsel in order to determine legitimacy, as this article does not endorse any particular setup.