What is permitted
Federal regulation has long accepted rounding recorded time to the nearest increment, on the basis that it averages out. The commonly used increments are:
- Nearest 15 minutes — the quarter hour, by far the most common.
- Nearest 6 minutes — a tenth of an hour, common in professional services billing.
- Nearest 5 minutes.
The critical word in every version of the rule is nearest. Rounding is permitted because, applied honestly, it is as likely to add a few minutes as remove them, so over time the employee is fully compensated. Everything else follows from that reasoning.
The seven-minute rule
With quarter-hour rounding, the midpoint is 7½ minutes. Punch at 8:07 and the time rounds back to 8:00 — you are paid from 8:00, gaining seven minutes. Punch at 8:08 and it rounds forward to 8:15, losing eight. This is where the "seven-minute rule" comes from. It is not a separate rule; it is just where the midpoint falls.
What is not permitted
Rounding that systematically favours the employer. Specific patterns that fail:
- Always rounding down on clock-in and up on clock-out. This can only ever take time. It is the clearest violation and the easiest to spot.
- Rounding only in one direction. A system that rounds a 8:07 punch to 8:15 but an 8:53 punch to 9:00 is not rounding to the nearest anything.
- Rounding that neutrally applied still produces a consistent shortfall, because of how shifts are scheduled. If shifts start on the quarter hour and employees are required to be ready at start, punches cluster before the hour and rounding forward becomes systematic in practice.
- Rounding to increments large enough to swallow real work. Rounding to the nearest hour is not a rounding practice.
Recent enforcement and case law have moved against employer-friendly rounding generally, and some states — California notably — have narrowed it further, particularly for meal periods, where rounding is treated much more strictly than for shift start and end.
How to check your own
You need two things: what the clock recorded, and what you were paid for. Employers must keep accurate time records and you are entitled to see yours.
- Ask payroll for your raw punch data for a few pay periods — the actual timestamps, not the rounded totals.
- Compare each punch to the paid time. Note whether the rounding went up or down each time.
- Count the direction. Over a few dozen punches, honest rounding should be roughly balanced. A run of twenty punches that all rounded against you is not chance.
- Add up the difference. Eight minutes a day is about 35 hours a year. At $20 an hour that is around $700, and more if any of it would have been overtime.
The timesheet calculator has a rounding setting for exactly this comparison: enter your real punches with rounding off to see actual time, then switch to your employer's increment to see what their system produces. The gap is the effect of the policy.
Related traps
Work before the punch. Rounding is about the timestamp; it does not address time worked before clocking in or after clocking out. Booting a terminal, putting on required gear, or being expected on the floor before you punch is generally compensable, and no rounding policy makes it disappear.
Automatic meal deductions. Some systems deduct 30 minutes whether or not a break was taken. If you worked through lunch, that deduction is unpaid work, and it is a larger problem than rounding.
If it is going one way
Document it before raising it — dates, punches, paid totals, and the running difference. Then raise it in writing with payroll, since a written record establishes when you asked. If that does not resolve it, your state labour department takes complaints, costs nothing, and can compel the employer to produce records you cannot get yourself.
Related
- Which breaks have to be paid
- If the numbers do not add up
- What a workweek is, and why it decides your overtime
References
- 29 CFR 785.48 — rounding practices and recording time.
- DOL Fact Sheet 21 — recordkeeping requirements.