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Are we allowed to round off hours worked?

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in Compensation and Benefits,Human Resources

Q, My company tracks the hours of nonexempt em­­ployees using a time clock. In determining their wages, can we round up or down to the nearest five-minute increment?

A. Employers should first note that the Fair Labor Stand­­ards Act (FLSA) does not require employers to use a time clock. However, employers must keep records of the hours worked by nonexempt employees in some permanent form.

While “accurate” record-keeping is necessary, the FLSA does permit employers to “round off” a worker’s arrival and departure times to the nearest five minutes, one-tenth of an hour or quarter of an hour.

However, employers must ensure that their rounding practices do not always result in employees not being paid for time that they worked. That is, the rounding method should balance out over time.

For example, if an employer rounds to the nearest five minutes, it should either always round in favor of the worker or adopt a practice of rounding back to the previous five-minute mark for either workers’ starting or stopping times and round forward in the alternative situation.

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