Glossary · Pay rules
Timesheet rounding
Timesheet rounding is the practice of adjusting recorded start and stop times to a fixed increment, such as the nearest 5 minutes, tenth of an hour or quarter hour. Federal rules allow it only if it averages out so that employees are paid for all the time they work.
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This is general information, not legal advice. Laws differ by state and change over time. Check the primary sources below and talk to an employment lawyer about your situation.
What does federal law say about rounding?
The federal regulation allows employers to record starting and stopping times to the nearest 5 minutes, the nearest one-tenth of an hour or the nearest quarter of an hour. The practice is acceptable if it averages out so that employees are fully compensated over time, and it is not acceptable if it results in failure to compensate employees properly.
How does rounding change a timesheet?
| Punch | Actual time | Rounded to nearest quarter hour |
|---|---|---|
| In | 6:53 AM | 7:00 AM (7 minutes of work not paid) |
| Out | 3:08 PM | 3:00 PM (8 minutes of work not paid) |
| In, next day | 7:04 AM | 7:00 AM (4 minutes paid that were not worked) |
Rounding is a recording choice, not a theft; see time theft for the distinction. The raw punches should be kept so any rounded total can be checked.
What are the alternatives to rounding?
The common alternative is paying to the minute from the raw record. A system that stores a location-based start and stop time with its method gives a precise figure without a rounding rule, and a manager can still apply a written grace period for review.
Whichever policy a company picks, it should be written down and applied the same way to everyone. See also time and attendance for the records the rule operates on.
Frequently asked questions
Is timesheet rounding legal?
Is a grace period the same as rounding?
Should the raw punches be kept if time is rounded?
Sources
- 1.29 CFR 785.48, Use of time clock · Legal Information Institute, Cornell Law School
