Regulations on Rounding Employee Hours

Question:
Is it permissible to round off the minutes worked and pay employees in 5-, 10-, or 15-minute increments? Are there any special rules to observe when rounding off the minutes that an employee works?

Answer:
Yes, you can do that. The gist of the rule is that rounding off time has to be done in a fair manner. In other words, you cannot always round a worker's time down to favor the employer. To paraphrase an old saying, what rounds up, must round down.

The official policy is found in § 785.48(b) of the Fair Labor Standards Act under the heading of "Hours Worked Regulations" and is quoted below:

(b) ''Rounding'' practices. It has been found that 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 5 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.

It may be read in its entirety here: http://www.osha.gov/pls/upub/wageindex.download?p_file=F30725/WH1312.pdf