We have time clocks that rounds to 7 minutes before or after the hour. If an employee clocks in 8 minutes late, the time is recorded as 15 minutes after the hour so the employee is losing 15 minutes of time. If an employee clocks in 15 minutes early then the time is recorded as 15 minutes before the hour so the employee is paid an extra 7 minutes. We are most concerned with the late punches because they are losing 15 minutes of time. Is this typical in rounding practices and are we legal?
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Thank you for your inquiry regarding rounding practices when using timeclocks.
Your current rounding practice is permissible.
The FLSA regulations specifically permit employers to use time clocks that round up or down as long as the clock rounds both ways. This way, occasionally the employee gains some time and occasionally loses some time and, presumably, the total compensation averages out over time. (29 C.F.R. Section 785.48(b)). The regulations specifically discuss rounding practices in increments of up to a quarter of an hour and consider these acceptable.
With regard to the late punches, keep in mind that if an employee clocks in at 8:08 a.m. and the time is rounded up to 8:15 a.m., then he or she has only lost 7 minutes of time (rather than 15).
With this said, it is, of course, not required for employers to round time at all. If your timeclock/payroll system will enable you to pay employees based on the actual, exact time that they have clocked in, then this method is also certainly legal and permissible if it would be preferred. But, again, your current system is also compliant.
“If an employee clocks in 15 minutes early…”
Do you mean 8 minutes early?
Is rounding permissible when keeping written timesheets? For example, an employee arrives at 8:25 a.m. but writes 8:30 on the timesheet? Or leaves at 4:35 but writes 4:30 on the timesheet?