One of the questions we hear with some regularity involves time rounding. Time rounding can be a confusing topic for many people, so in this article we’ll explain what rounding is, how it can be used and illustrate how quarter hour rounding works.
What is Time Rounding?
Time rounding allows employers to round employee start and stop times to federally approved time rounding intervals which include: the nearest 5-minute interval, the nearest 1/10th of an hour or the nearest 1/4th of an hour. Additionally, the US Code of Federal Regulations and the FLSA specify that time rounding must be applied impartially. This means that start and stop times must be rounded both up and down depending on the punch time so that rounding is never used to withhold pay from an employee by only rounding in favor of the employer.
Remember that rounding applies to start and stop times. For example, employers can round a start time of 7:54am to 8:00am or a stop time of 5:05pm to 5:00pm. Time rounding is not applied to total hours worked, which means 8 hours and 7 minutes of work would not be rounded to 8 total hours worked.
What is Time Rounding Used For?
The main benefits of using time rounding include:
- Employees can clock in within a few minutes of their shift start or stop time and not be counted early or late during payroll calculations.
- Employers can prevent small amounts of overtime from adding up to count for daily or weekly overtime during payroll calculations.
Quarter Hour Rounding
Quarter hour rounding rounds employee start and stop times to the nearest 1/4th of an hour. The chart below shows an example of how start times are rounded using quarter hour rounding during the hour of 8 o’clock.
This chart shows that if a worker clocks in early for work at 7:54am, their start time will be rounded to 8:00am. If the same employee punches in five minutes late, at 8:05am, that time would also be rounded to 8:00am.