California’s Rules Regarding Rounding Time Clock Entries

Rounding Practices

Frequently, employers’ timekeeping practices include “rounding policies” and “grace periods”. These policies permit employees’ clock-in time to be adjusted around start and stopping work times for administrative purposes. If an employer has a quarter-hour “rounding policy,” employee time is rounded to the nearest quarter hour.  Therefore, an employee who clocks in at 8:07 AM would see his wage statement reflect a clock-in time of 8:00 AM, whereas a clock-in time of 8:08 AM would be rounded to 8:15 AM. Likewise, an employer may have a “grace period” that excludes the time an employee is clocked-in either ten minutes before or after the employee’s scheduled shift.

Rounding Rules

The regulations that implement the Federal Fair Labor Standards Act (“FLSA”) allow an employer to “round” employees’ clock-in and clock-out times to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. (29 CFR § 785.48(b)). Under the federal standard, time rounding is permitted as long as the adjustments do not result, over a period of time, in the underpayment of wages to the employee. The same rounding rule applies in California. California courts have explained that: (1) any rounding must be “fair and neutral,” meaning that time must be rounded up as well as down; and (2) as applied, the policy must not result in a failure to compensate employees fully over time. (See’s Candy Shops, Inc. v. Superior Court).

Application

In practice, the amount of time employees may gain or lose from a rounding policy may fluctuate from day to day. This means that an employee’s actual “time worked” may not equal the “time paid” every pay period. On this point, the courts have said that rounding rules do not require every employee to “break even” every pay period. Nor do rounding rules require employers to engage in a “mini actuarial process” each time they run payroll. (Corbin v. Time Warner). Instead, rounding policies are meant to average out in the long-term to the employees collectively. Consequently, an employer is not required to verify every pay period that the rounding policy benefitted every employee. On the other hand, it is unlikely that a court would allow an employer to cherry-pick the period of time to show that the employer’s rounding policy was fairly applied.

California employers should consider periodically auditing rounded time records and actual time entries to ensure that over time the rounding policy does not “short” employees. As for shift-beginning and ending “grace periods”, the system is still to be fully explored by a California court. That said, employers should exercise the same caution with grace periods as they do with rounding policies.

15 Comments


  1. Hello, I have a temp agency trying to implement a strict rule – temps are being written up for clocking in back from lunch at 1min past their scheduled return time. Is this a valid practice?

    Reply

  2. What if u start at 6:30 am and clock out at 2:55 or 2:53 pm can they dock you for 15minutes

    Reply

    1. Unfortunately, we can’t answer questions specific to a given work situation. The answer would depend on your scheduled work times, whether you are salaried or hourly, and your employer’s time-rounding policy. Rounding policies can at times result in employees being slightly underpaid or overpaid. Rounding is lawful under California law if the policy is neutral on its face and if, over time, these fluctuations balance out so that there is no net loss to employees as a whole. There is no requirement that rounding must work out neutrally for every individual employee.

      Reply

  3. My employer rounds to the nearest 30 min. I worked 14 min of overtime and didn’t get paid for any of it. I arrive at work at 8:46am and did not begin getting paid until 9am. I worked 16 min of overtime but because I clocked in 2 min late for work that day I got paid nothing. Is it legal to round to the nearest 30 min? This has only benefitted me one time but I have been underpaid numerous times. I am not looking to file a claim against my employer, I am only looking for the correct law to show them that they are not following it so that they can it. Thank you.

    Reply

    1. Hi Heather,

      Unfortunately, we can’t provide legal advice. We recommend you consult your personal legal representative. You may be interested in reading the 2018 California case AHMC Healthcare Inc. v. Superior Court.

      Best of luck!

      Reply

  4. My employer just notified us by email that stating on 04/29/19, rounding will no longer be used for our clocking. Is it illegal for them to change the rounding with out notifying the employees first? I checked my clocking and I lost time. Most days I clock in 7 min. early (which was our rounding time) and stayed until after 4pm (I work 7:30-4) I normally clock in around 7:23-7:25 and clock out around 3:55-4:07 depends on if I finish my work or not.
    Thank You!

    Reply

    1. Thank you for your question. Your situation raises several significant legal issues. Unfortunately, we are not able to provide legal advice. We encourage you to consult your legal advisor for your specific work situation.

      The Research Team.

      Reply

  5. The company I work for is using a program Called Tsheets I am dispatched from my house in a company vehicle. I clock in when I start the vehicle to a specific job or work order number. I’ve notice a 6 minute delay not alot, however if I have several job/wo a day there is 6 minutes off each one and time at the end of the day is not rounded up. Who do I see at Cal. Labor Board about this.

    Reply

  6. Does a Employer need to publish/display the rounding rules in California? We use ADP’s 15 Minute Modulus for our time clock rounding. We have been manufacturing in California since 2014 and this came up in a discussion on whether we needed to display. I looked in the regulations and couldn’t find anything and found your board. If possible could you please advise. Kindest regards,

    Reply

    1. Hi There,

      In California, an employer’s time rounding practice does not need to be posted. California regulations do not specifically address time rounding. California follows FLSA regulations, 29 C.F.R. § 785.48. You may find informative the California Div. Lab. Standards Enforcement, Enforcement Policies and Interpretations Manual (Revised) at 47-1 (August 2019), https://www.dir.ca.gov/dlse/DLSEManual/dlse_enfcmanual.pdf.

      Best of luck,
      CPC

      Reply

  7. Is time rounding a law or an option for an employer?

    Reply

    1. Good afternoon,

      California follows federal regulation 29 C.F.R. § 785.48(b) which permits time rounding provided certain requirements are met. (See AHMC Healthcare, Inc. v. Superior Court of Los Angeles County.) California’s Division of Labor Standards Enforcement (DLSE) has approved rounding practices that meet the requirements of this regulation. (See DLSE Enforcement Policies and Interpretations Manual (August, 2019), 47.3, “Rounding Practices”, https://www.dir.ca.gov/dlse/DLSEManual/dlse_enfcmanual.pdf). Rounding practices are permissible but not required.

      Hope that helps,

      The Research Department

      Reply

  8. Hello there!
    Our employer changed a clock in/out policy this is how it works
    start time 5am can’t clock in before it has to be 5am, we get 7Min to clock in however
    any time after 5am Won’t be pay same for Lunch and clock out, we asked for a graced period to clock in 5min before 5am but they refused, we have about 120 Employees
    on Days and it takes 10 sec. per Employee to clock in and 8 clocks available so only 6 people is going to be able to clock in the first minute per clock =48 leaving 72 Employees loosing 1 and 2 minutes X Lunch And Clock out here is the other catch if you pass the 7min. when clocking in It gets Rounded to the nearest 15min =5;15am same applies for Lunch and Clock out and you get Points for tardy (point system before write up) Now sense i was late 2 min clocking in then some people would be late clocking Out however HR said clocking out after your schedule will result in unauthorized Overtime therefore Disciplinary action will occur and More Point Issue!
    Wouldn’t this Violate (federal regulation 29 C.F.R. § 785.48(b))

    Thank for your help!

    Reply

    1. You describe a tough situation. Unfortunately, we are not able to provide guidance regarding specific situations. We suggest you contact the California Labor Commissioner’s Office, at a location listed here https://www.dir.ca.gov/dlse/DistrictOffices.htm, or contact your legal advisor.

      Best of luck,
      The Research Department

      Reply

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