By Rick Bell
Nov. 22, 2020
Timesheet rounding is a common business practice that is perfectly legal.
According to one survey, 55 percent of employers utilize the process to simplify their payroll, typically rounding an employee’s logged hours in 15-minute increments.
Despite potential pitfalls for employers that could lead to costly lawsuits, timesheet rounding is a practice that appears to be entrenched in the payroll process. Automating it with digital time and attendance solutions can curb and even eliminate the need for timesheet rounding.
Also read: Build and send employee schedules in seconds
A workforce management solution also will go a long way to keep an employer safely in compliance while fairly compensating employees for the time they have worked.
Issues with timesheet rounding
Timesheet rounding only works when it’s done equitably for employers and employees. The Fair Labor Standards Act states that employers may round time if it averages out so that employees are fully compensated for the time they actually work.
Employers should be aware that timekeeping regulations vary from state to state. Employers also must ensure that their system is “free from bias” and that employees are paid for all time worked, which can be a tough sell in front of a labor law judge for companies using a paper-based system. An automated process will make for a much more convincing case.
Avoid guesswork and approximations
Most organizations that still round employee time round up or down to the nearest 15-minute mark on timesheets. Many businesses still use paper-based methods for time tracking, including punching time cards. Accurate logging becomes complicated, since your employees typically punch in at a designated location and then move to their actual workplace.
While having faith that your workers are honest and trustworthy is commendable, most of your employees are not experts in payroll practices. Allowing employees to manually enter their time on a time card or spreadsheet can lead to errors based on their time estimations, which also can slip past your payroll department.
As a result, you’re likely paying too much or dangerously too little in wages and overtime. And there is lost productivity with every pay period.
Automation helps control rounding estimates
With the technology and tools available today there is no need to play the rounding guessing game. Sure, the FLSA has mandates and rules in place for rounding. But investing in a proven automated online workforce management platform will conveniently track employee time to the exact minute and eliminate the need for rounding, which saves you in hours of overpaid minutes.
Good timekeeping practices prompt compliance
A primary reason the Department of Labor keeps time rounding in place is because so many businesses still use manual processes to track their employees’ time. Yet the DOL can drop the hammer at any time and request an audit of your company’s timekeeping practices.
With the automated workforce management solutions and resources available to organizations, timesheet rounding shouldn’t be a preferred option. For businesses that are still rounding employee timesheets or permitting them to manually log their hours, take the time to take control of that cost. With the right workforce management platform, employers can accurately and effortlessly collect their employees’ time and attendance data without using the practice of timesheet rounding.
Pay your employees for every second of the hard work they do and have the peace of mind to know that you are in compliance with Workforce.com’s time and attendance solution.
We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.
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