Time clock rounding is a handy practice that many businesses adopt to make their time tracking more efficient. Essentially, it’s a method employers use to round off the hours logged by their team, primarily for the sake of simplifying payroll and invoicing.
Interested in discovering the advantages, typical applications, and legality associated with time rounding? Keep reading to get the details!
What is it?
In short, time rounding is the rounding of an employee’s work hours to a specific interval, usually in 15 minute increments.
For instance, if a team member clocks in at 3:57 PM and time rounding is configured with 15-minute intervals, their recorded start time would be adjusted to 4:00 PM.
This action of rounding can be done manually however it’s likely you’ll want to choose a time and attendance solution like Everyminute that will automatically adjust punches based on preset rules.
Why do Companies Round Times?
These rounding methods are often used to simplify payroll calculations, reduce administrative burden, and ensure that minor variations in clocked times do not result in significant discrepancies in compensation.
Some businesses may also use time rounding to prevent employees from clocking in before the start of their scheduled working hours. This is mostly common with companies that utilize a physical punching device, such as a biometric clock, that is located in one spot while the workspaces of the staff are in various places.
As with most things, it’s vital that you establish clear policies and communicate them transparently to avoid misunderstandings or disputes among your team members. Additionally, compliance with labor laws and regulations is essential when implementing these practices.
Is Time Rounding Legal?
In the U.S, timecard rounding is a legal practice so long as it’s enforced within the rules set forth by the Fair Labor Standards Act (FLSA) and the Department of Labor (DOL). The maximum legal rounding increment for employees is 15 minutes. Anything outside of that 15 minute window exposes your company to legal trouble.
The majority of companies employing time rounding typically use this maximum rounding increment. No matter what, the rounded punches must always be either neutral or favorable towards employees. When in doubt, round punches to a time that favors your employees.
Accurate and comprehensive record-keeping is always essential but especially when rounding employee work hours. It’s important to store essential information such as the total hours worked by employees each day and week, overtime earnings, and wages paid during each pay period
The 15-Minute Rounding
To correctly utilize the maximum rounding increment, you must adhere to the ‘7-minute rule’. If someone clocks in at, let’s say, 10:07 AM, it must round down to 10:00 AM. But if it’s 10:08 AM or later, this individual’s punch would be rounded up to 10:15 AM.
5-Minute Rounding
This approach divides every 5 minutes into two intervals of 2.5 minutes each. If an employee clocks in or out within the first 2.5 minutes of that period, the time is rounded down. However, if the punch occurs in the latter half, the time is rounded up to the nearest 5 minutes.If someone clocks in at 7:02 AM, we’d round it down to 7:00 AM, and if it’s 7:03 AM, we’d round it up to 7:05 AM.
6-Minute Rounding
This idea splits time into 1/10ths of an hour and uses 6-minute increments (6×10), each split into 3-minute intervals. For every three minutes after each 6-minute increment, time is rounded down. Conversely, the second half of the interval rounds up to the nearest 6 minutes.
Transparency
Being upfront with employees encourages them to play a part in the company’s success, making them more involved and satisfied with their work. It helps build a sense of belonging and boosts engagement among the team members.
Whether you’re onboarding a new employee or implementing a new rule that will apply to all existing team members, it’s crucial that they are made aware and are given a chance to ask questions. This is especially important with changes that will affect their timecards.
How Can We Start?
Although it’s possible to manually adjust these settings for each employee’s time card, it’s strongly advised to employ a time and attendance software. This software will automatically implement changes as punches are recorded, minimizing the likelihood of errors. Utilizing tools like Everyminute can significantly enhance efficiency and speed up the process. Such tools also enable your team members to log in and review their own time cards, fostering transparency and cultivating a positive work dynamic.
Conclusion
Rounding your team’s time cards can bring benefits by simplifying the payroll process and streamlining wage calculations. However, it must be implemented carefully and communicated clearly to all team members. When in doubt, it’s best to pay employees based on the actual times their punches were recorded.
If your business decides to employ time rounding, it’s crucial to ensure that rounded punches are either neutral or favorable to the employee. Failure to adhere to the guidelines set by the Department of Labor (DOL) and the Fair Labor Standards Act (FLSA) can result in legal consequences.
