Time clocks: What’s the law on rounding up, down?

Q. Our time-clock software allows for a five-minute grace period at the start and end of each shift. For example, if the employee’s designated start time is 8:30 a.m. and the employee clocks in at either 7:56 a.m. or 8:04 a.m., the actual start time will be logged as 8:00 a.m. for pay purposes. Is this OK? — M.N., Florida

A. Yes, as long as the rounding benefits both the employee and the employer equally. U.S. Department of Labor regulations specifically discuss time-clock rounding issues. (29 CFR 785.48(b)) Here’s what they say:

“In some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees’ starting time and stopping time to the nearest five minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work. For enforcement purposes, this practice of computing working time will be accepted, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.”