The most important thing you need to know about employee time clock systems.

The most important thing you need to know about employee time clock systems.

You want a new employee time and attendance system because it promised to reduce the time and effort required to do the weekly payroll. That makes compete for sense and every company, regardless of size, should be striving to improve business processes. This is the core advantage of a modern time clock system.

There are other clear benefits a modern employee time clock system can provide, such as a reduction in employee time theft (when using biometric time clocks) and the complete removal of paper attendance records. Integration with payroll is also a feature of these systems, and certainly, that can save the data entry.

But what if I told you there was a single feature that almost certainly will offset the core advantage of a time clock system. Well, there is, and that is a thing called rounding.

To understand rounding, you must first understand that an electronic time clock, unlike a time sheet, records exact times for each employee. A timesheet by contrast, generally displays the employee was supposed to start and finish work. 

An employee's written time sheet may record a start of 9:00am and a finish of 5:00am.

A time clock record will record accurate times of perhaps 8:45am and 5:05pm.

Most companies would "round" the early clocking forward to 9:00am and the clocking at the end of the shift back to 5:00pm. If they didn't, the hours for the day would be calculated at 8 hours and 20 minutes rather than 8 hours.

The problem is that each and every clocking event may require different rounding rules and unfortunately entry-level employee time clock systems usually can't do this.

More often than not, companies apply a global rule for all clocking such as "round to the nearest 15 minutes" which rarely suits all the clocking events. 

A Case in Point

Let's look at a case, for example, where an employee works 9am to 5pm with a 30-minute break. The attendance rules also accommodate overtime at the rate of time and one half for the next 3 hours a then double time after that.

An employee clock in at 8:45

Clocks out again for lunch at 12:35

Clocks back in again after lunch at 12:55

They clock out at the end of the day at 8:15 after doing overtime. 

There are very different rounding rules that may apply depending on the organisation. Here is one example of how an organisation may apply its attendance rules.

• The in clocking at the start of the day must be rounded forward to the start of the shift.
• The lunch clocking in clocking should not be rounded.
• The lunch out clocking should be either rounded forwards to 30 minutes from the in clocking or left as is if the break time was more than 30 minutes.
• The out clocking may be rounded back to the next 15-minute interval.

Clearly, this is a very complex set of rounding rule... and it gets worse.

Let's take a look at the different ways that a business may treat the clocking of an employee who arrives late 8 minutes late for a 9.00am shift in the morning. This is just one of the clocking events for the day. The employee clock is 9:08 am.

Company A: Applies a nearest 15-minute rule and rounds the clocking to the nearest 15-minute interval; so the clocking is adjusted to 9:15 and the employee loses 15 minutes for the day.

Company B: Pays the employee from the time they clock in, so the clocking is left at  9:08 and the employee loses 8 minutes for the day.

Company C: Gives the employees 10 minutes "Grace Period" for the day, so in this case, they would pay the employees from 9:00am, so the employe does not lose any time for the day.

Company D: Pays the employee from the time they clock in so this employee would lose 8 minutes for the day. 

When it comes to the out clocking for the day, all of these rounding rules are entirely irrelevant. Most commonly, the out clocking for the day should round to the end of the shift, unless of course, it is an overtime clocking in which case the rounding rules could be one of many different rules.


So it becomes obvious that a one size fits all approach to rounding simply will not work.

If the most significant benefits a time and attendance system can deliver is a reduction in the time taken to process your weekly payroll and to improve the accuracy of the payroll hours calculations then this will be severely compromised if the system can not perform complex rounding.

Moreover, the only way to correct issues created by inflexible rounding rules is to make manual adjustments, and that is a time consuming and inefficient. In fact, it may well be less efficient than your manual system.

Summary

Employee time clock systems have the potential to improve the process of accurately calculating employee payroll hours while simultaneously reducing errors and eliminating time theft. This is, however, conditional on the selection of an appropriate system with flexible rounding rules.

If you look at the acquisition of the system as a return n investment rather than an expense, you will be more inclined to invest in a product which does deliver the promised benefits.

The Time & Attendance Consultant