One of the topics our customers seem to sometimes find confusing is that of “rounding.” See, it’s one of those things that — if you use it correctly — can make your life a lot easier… but if you don’t, it can make for big trouble.
Which I guess scares some folks a bit. Can’t say as I blame them. Wage and hour lawsuits and DOL investigations aren’t a lot of fun.
So a lot of people simply don’t use the rounding settings in their time and attendance software. But, honestly, I think that’s a mistake. And I’m not just saying that because I work for a time and attendance company! Configured properly, rounding rules in your software can save you time on payroll preparation and could even save you money.
Basically, rounding (when used properly) makes sure you don’t pay people extra for clocking in early (before they actually start work) or for clocking out late (after the work day has finished).
For instance, you know how sometimes folks like to show up a few minutes early so they can grab a cup of coffee and a pastry from the company cafeteria? Sometimes, just to make sure they don’t end up clocking in late, people will clock in before they head down for their morning caffeine.
And it makes sense — they can get right to work when they get back to their station without having to stand in line with the other late arrivals at the timeclock.
Of course, you could program a lockout on the clock so people can’t punch in until just before their scheduled start time. But that just means bigger backups at the time clock, which might not be such a good thing. These folks clocking in a little bit earlier actually help relieve congestion around the terminal or clock. So while this “few minutes early punch-in” isn’t necessarily something you want to discourage, by the same token, you don’t necessarily want to find yourself paying for that time, either.
Now, if you don’t want to find yourself paying for that coffee-and-donut time, rounding is your friend. You can set up rounding rules in your time and attendance software to insure that people who clock in a few minutes early actually get paid as though they arrived exactly on time… and people who clock out a few minutes late get paid as though they left at the stroke of Miller Time.
Your alternative is to manually deduct that time from employees’ work hours… or pay them overtime for time they aren’t actually working. (Frankly, neither one of those sounds like a very satisfactory alternative to me.)
Naturally, there are some rules you need to follow and some cautions you need to be aware of.
Of course, nothing substitutes for a chat with your local employment lawyer or wage and hour consultant. Before you make any changes to your pay policies, you should check with them to make sure you’ve covered all your bases.
But seriously, if you haven’t configured the rounding settings in your time and attendance software,look into it! You might be surprised by how easy the settings are to configure, and how much hassle it can save you in the long run.