For most of us, time rounding is a fact of life. We’ve all been through it and we will all continue to go through it.
However, if you’re new to this world of timekeeping, there are some things you should know about how your company handles rounding (and how they should be doing it). So grab a cup of coffee and let’s dive in!
What is time rounding?
Time rounding is the practice of using a timekeeping system that records a time interval as the nearest multiple of five minutes.
For example, if a worker clocks out at 4:50 p.m., they will be recorded as having clocked out at 5 p.m.—even though it was only four minutes after their scheduled time to leave the workplace.
This will allow them to have an extra fifteen minutes off work that day and no one needs to do the math!
Time rounding has been around since the early 20th century, but today it’s most commonly used with computer programs that calculate overtime pay for employees based on their actual hours worked over 40 in a week (or another period).
Why is timesheet rounding necessary?
It’s no fun to worry about whether you’ve rounded up or down, so why bother? Well, for starters, it’s the law.
In many cases people are required to keep track of their time.
Whether it’s an hourly wage or a salary that comes with a guaranteed minimum amount per year, there are legal implications if employees don’t keep an accurate record of the hours they worked. If someone spends all day at the office but doesn’t clock in until 11am and clocks out at 4pm (even though they were really busy), their employer could be accused of underpaying them for their work.
Working on projects that require more than eight hours in a day is not uncommon—but that doesn’t mean you can get away with clocking only eight hours! At this point many businesses will start tracking overtime and paying extra when employees work beyond 40 hours in one week or 80 hours over two weeks (depending on your company).
Accurate timesheets are essential here too: The last thing anyone wants is an audit showing discrepancies between reported working time and actual working time!
Decide your own rounding rules
You’ve decided you want to do it. But which rules should you use? In general, the rounding rules that work best for your organization will be consistent across your organization and fair and understandable.
Time clock rounding rules and legal issues
Time rounding is legal in most states and it’s done all the time by employers, but you should be aware of your state’s rules before you start.
Each state has its own set of rules around rounding.
Some states require that employees receive additional compensation at a certain threshold, while others simply don’t allow employers to round at all. For example, if you live in California, then your employer is allowed to round your time up or down so long as they keep track of any additional wages paid out with one second accuracy (you’ll see this referred to as “tenth-of-a-minute” accuracy).
The reason why these laws exist is that some states have minimum wage laws that require an employee be paid for every minute worked—but other states do not have such laws and thus allow for rounding practices like those described above.
Don’t change the rounding rules too often.
You should also avoid changing the rules too often.
I know this sounds counterintuitive, but if you want to make change stick, it’s important for employees to get used to the new system.
Don’t change them in the middle of a project or dispute: This can be confusing and difficult for people who are already working with these systems every day. If there is an emergency situation that requires an immediate solution, consider using a workaround instead of making changes during an ongoing project.
3 Best practices for time clock rounding
The four best practices for time clock rounding are:
- Use a time clock that is easy to use. Make sure the time clock is accurate and easy to read, so you don’t have to worry about rounding errors.
- Keep track of your rounding rules. Whether it’s on the back of the employee handbook or in a spreadsheet, keep track of how many minutes after the hour you’re going to round up or down so that it doesn’t happen by accident.
- Make sure your employees understand how rounding works—and if at all possible, practice it with them before they start working! With time clocks like ours here at Time Analytics, there’s no need for awkward conversations about whether or not an employee has been paid appropriately (or even enough).
Communicate your rounding rules to employees
Rounding rules can be difficult to implement and even more difficult to enforce. They often require employees to track time and stay within certain bounds, which is not always easy or practical. But if you are going to use rounding at all, the rules must be communicated effectively and enforced consistently.
To ensure your rounding policy works well for everyone, consider these tips:
- Communicate the rules clearly to employees so they understand why these policies are in place (and what will happen if they don’t follow them). Explain how important accuracy is in this situation, especially if it impacts billing or payroll calculations. This way, everyone knows what’s expected of them and why those expectations exist. You may also want to remind employees that they could face repercussions—like being docked pay—if they break the rules too often over time (or even immediately).
- Use a consistent approach every time an employee clocks in or out of work so there’s no confusion about when their shifts start or end based on whether their manager has rounded up or down from their actual arrival/departure times during any given day (e.g., “You showed up at 9:10,” vs., “We clocked you at 9:08”).
There are a lot of ways to round time, but there is no one right way. You can change your rounding rules as needed, and you should do so with care. If you’re struggling with how to handle rounding, we recommend using the tips in this article as a starting point for your own solution!
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