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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?

Quarter-hour rounding on the same punches
PunchActual timeRounded to nearest quarter hour
In6:53 AM7:00 AM (7 minutes of work not paid)
Out3:08 PM3:00 PM (8 minutes of work not paid)
In, next day7:04 AM7:00 AM (4 minutes paid that were not worked)
Illustrative. The first two rows both favor the company. If most days look like this, the rule does not average out.

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?
Federal rules allow rounding to the nearest 5 minutes, tenth or quarter hour if it does not result over time in underpaying employees. State rules can be stricter, so check yours.
Is a grace period the same as rounding?
No. A grace period excuses a short lateness without changing the record. Rounding changes the recorded or paid time itself, up or down.
Should the raw punches be kept if time is rounded?
Yes. The raw times let anyone check that rounding averages out and answer a question from a worker or an auditor.

Sources

  1. 1.29 CFR 785.48, Use of time clock · Legal Information Institute, Cornell Law School

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