Going ‘round and ‘round on timecards? Find out how to safely round work hours
Timeclocks are a familiar sight in many industries. Employers don’t have to use them, but they may. Others might use paper or electronic timesheets to track employees’ working time. Such measures can help employers comply with the federal Fair Labor Standards Act (FLSA), which requires employers to pay hourly (nonexempt) employees for all hours worked and keep related records. In our imperfect world, employees sometimes punch in or out early or late. To help make the payroll process easier, some might wonder if employers may round the time.
Yes, with some considerations.
Employers don’t have to pay for periods when employees voluntarily come in before their regular starting time or remain after their closing time, provided that employees don’t perform any work during those times. If employees perform work, however, they must be paid for that time.
Records should reflect the hours worked as accurately as possible. Making regular changes to timecards can create the impression that the company is “shorting” the employees or unlawfully trying to avoid paying overtime.
How much rounding?
Some employers round employees’ starting time and stopping time to the nearest 5 minutes, one-tenth, or a quarter of an hour. Presumably, this averages out so that the employees are fully paid for all the time they really worked. Employers may use such a practice as long as it won’t result in failure to pay employees properly for all the time they have really worked.
Employers might risk violating the FLSA, however, if they always round down. They may, for example, round down employee time from 1 to 7 minutes, and thus not count those minutes toward the hours worked. They must, however, round up employee time from 8 to 14 minutes and count it as a quarter-hour of work time.
If, therefore, an employer rounds only to the “disadvantage” of the employee, it would violate the FLSA because it would result in paying the employee for fewer hours than the employee truly worked.
Chronic timekeeping issues
If employees continually punch in early or late, employers should treat it as a disciplinary issue, not a “rounding” issue. Employers can tell employees that if they are clocked in, they are expected to be working. They can be disciplined or terminated for falsifying timecards (knowingly punching in without intending to work, which is essentially stealing from the company) or for wasting time when they should be working.
Key to remember: Employers may round up or down timecard entries in insignificant amounts, but doing so should have equal advantages for both employers and employees; always rounding down can be risky.