Human Resource Blog

Timeclock Rounding

Is there a “norm” when it comes to rounding for Hourly employees and a time clock? i.e. round to the nearest 15 minute interval, 7 minute interval, etc.? Are the standards differnet between Federal and State?

There is no universal norm for timeclock rounding. Most employers round an employees hours to the nearest 7 minutes or 15 minutes. Some computerized timeclock or payroll programs use tenths of an hour, or the nearest 6 minutes. An employer can calculate an employees hours to the minute, if they like, although this is very uncommon.

All of these systems are legal under both federal and state laws, as long as they are applied consistently to all employees.

Suppose an employer rounds to the nearest 15 minutes. When Jean clocks in at 8:07, her time is rounded down, and she is paid beginning at 8:00. When she clocks in at 8:09, her time is rounded up and she is paid beginning at 8:15. The philosophy is that as long as the employer uses this method all the time, it evens out. Sometimes Jean is paid for a few more minutes than she actually worked, and sometimes she is paid for a few less minutes than she actually worked.

However, if the employer used different methods at different times, to cheat employees, that would be a violation of the various state and federal minimum wage laws. Suppose when Jean clocks in at 8:07 her employer decides to round to the nearest 7 minutes. Jean would be paid from 8:07. However, the employer follows the 15-minute rule when Jean clocks in at 8:10. Instead of being paid from 8:07, Jean is paid from 8:15. This would be illegal under the various minimum wage laws, because Jean is always going to lose time this way.

In a few more years, this question probably will be obsolete. Most employers use computerized payroll programs that automatically calculate time.