Rounding Out to the Same Amount

“I’d like to consider using rounding for time clock entries but I’m not sure how it works.”

Your HR Survival Tip

Rounding is the practice of rounding time clock entries up or down to the nearest nth of an hour. This has been authorized by federal law for a long time, with California and other states following it. The most important factor is that your policy is viewed as neutral… meaning neither the employees nor employer should see a financial gain or loss by it over the long term.

You can round to the nearest 1/12th (5 minutes), 1/10th (6 minutes) or 1/4th (15 minutes) of an hour. The measure you use is that which is easiest for your time clock and payroll system to recognize. Here are a few examples of rounding:

• Clock-ins at 8:03a = Rounded to 8:05a (5-minute rounding) or 8:00a (6-minute or 15-minute rounding).
• Clock-ins at 8:08a = Rounded to 8:10a (5-minute rounding) or 8:06a (6-minute rounding) or 8:15a (15-minute rounding).
• Clock-outs at 4:58p = Rounded to 5:00p (all rounding).
• Clock-outs at 5:07p = Rounded to 5:05p (5-minute and 6-minute rounding) or 5:00p (15-minute rounding).

While either the company or the employee may benefit each pay period, the expectation is that it will be neutral for both over several months. One of the advantages of this policy is that employees don’t have to stand by the time clock to punch in or out exactly on time. The advantage to you is the elimination of calculating pay for those odd minutes here and there.

Please ask for professional help with this so it’s implemented correctly. This is a policy that needs to be rolled out verbally and in writing so your employees fully understand how it works. You need to be clear that the over- and under-payments each pay period will average out so employees will not lose any pay over time.