Some of the information you need to store include total employees' time worked each day and week, overtime earnings and wages paid each pay period When you round employee work hours, it’s key to maintain accurate and complete records.Regardless of the rounding method, you must still observe the minimum wage and overtime requirements to stay compliant.The maximum rounding increment allowed by FLSA is 15 minutes so anything greater than that exposes your business to potential legal trouble.If it’s impossible to ensure a “neutral” outcome, rounding should favor the employee Time clock rounding should be performed in a way that doesn’t favor the employer but rather “averages out so that the employees are fully compensated for all the time they actually work”.If you choose to round to 15-minute increments, you need to observe the 7-minute rule for every 1 to 7 minutes that are rounded down, there is a corresponding timeframe of 8 to 14 minutes that are rounded up to the nearest quarter-hour and counted towards total work time.Here are a few things to keep in mind when rounding work hours: This method can’t be used as a means of cutting labor costs or favor the employer in any way. The Department of Labor (DOL) allows employers to round time up or down within 15-minute increments, but there’s a catch. And yet, some small-business owners still use rounding to calculate their employees’ wages. These days, thanks to GPS-enabled time tracking and payroll automation, fishing for small deviations from regular clock-ins and clock-outs has become much easier. Depending on the type of your business and general industry practices, you can round work hours in 5-minute and 15-minute increments or to 1/10th of an hour (more on that in a moment). In a nutshell, time clock rounding means that the actual work hours of your nonexempt employees are rounded up or down by set increments.
“So, what does time clock rounding mean?”
This can be done either by asking employees to write their hours down, using regular time clocks or through time-tracking software. Under the Fair Labor Standards Act (FLSA), all employers are required to track and store employee time records completely and accurately. Time clock rounding helped streamline calculating wages and save chunks of time in the process.īut does it still make sense today? What Is Time Clock Rounding? Back in the day when handling payroll was pretty much a pen-and-paper process, employers would use rounding to account for odd minutes and seconds outside the regular work schedule.
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