What Is The 7 Minute Time Clock Rule? The Employers' Guide

In this article, we'll dive into what the 7-minute time clock rule is, how it works, and who can benefit from it.

What is the 7-minute time clock rule?

It’s not a law; it’s an example of quarter-hour time-clock rounding the FLSA permits only if it’s genuinely neutral and averages out over time.

Under federal guidance, employers may round recorded time to the nearest 5, 6 or 15 minutes, as long as the practice does not systematically reduce pay. The well-known illustration is “1–7 minutes down, 8–14 minutes up” when using 15-minute increments. That shorthand is policy guidance for enforcement, not a statutory grace period.

Why neutrality matters

Rounding must “average out” for employees over time; an always-down approach risks underpayment of minimum wage or overtime. U.S. DOL materials warn that biased rounding can violate the FLSA, so you need evidence your practice is neutral.

Common pitfalls to avoid

Do not round meal periods or ignore work performed during an early “grace” window—those minutes are compensable if work occurs. If your system already captures to the minute, continuing to round increases legal risk in several states.

how rounding examples actually work:

Increment	Clocked time	Paid time (illustrative)	Compliance note
15 minutes	08:07	08:00	1–7 down only if practice remains neutral overall.
15 minutes	08:08	08:15	8–14 must round up.
5 or 6 minutes	09:03 (5-min) / 09:04 (6-min)	09:05 / 09:06	Smaller increments still require neutrality.

💡If you’re using Shiftbase, you can turn off rounding or set neutral rounding intervals (1–30 minutes) and apply separate rules for clock-in and clock-out in Timesheet and Punch clock management. This helps you demonstrate neutrality, or move to minute-accurate pay.

Should you round in 2025? A quick decision tree

If you already record exact minutes, rounding usually adds risk without real benefit.

👍 When rounding may still be acceptable

You lack minute-accurate capture (legacy clocks) and use small, neutral increments with quarterly audits; you do not round meals; and you operate outside high-risk states. Even then, maintain reports showing that employees neither gain nor lose overall.

❌ When to avoid rounding altogether

You have minute-accurate time records, operate in California or Washington/Oregon, or have active meal-break litigation risk (healthcare, large hourly workforces). Recent cases show juries scrutinise rounding combined with break issues. Choose exact-minute pay.

The decision tree (step-by-step)

Do you capture exact minutes today? If yes, pay exact minutes. If no, go to 2.
Are you in CA/WA/OR or healthcare? If yes, pay exact minutes. If no, go to 3.
Can you prove neutrality quarterly (per employee), and exclude meals? If no, pay exact minutes. If yes, limited rounding may be used with documentation.

✅ Manager checklist (to implement safely)

Written policy stating rounding is neutral and audited.
Exclude meal periods from any rounding.
Run quarterly neutrality reports; correct any net-loss patterns.
Re-evaluate after tech upgrades or process changes.

💡In Shiftbase, you can set minute-accurate timekeeping or configure “round to nearest” rules and approve hours with an audit trail—making neutrality checks straightforward.

Compliance snapshot

Federal law tolerates neutral rounding, but state trends (especially California and Washington) make minute-accurate pay the safer choice.

Federal (FLSA) position: DOL enforcement accepts rounding to the nearest 5, 6, or 15 minutes if it does not, over time, deny pay for hours actually worked. The classic 1–7/8–14 example remains guidance, not statute. Keep records that prove neutrality.
California (high-risk): Appellate decisions have questioned rounding where employers already have precise data; Camp v. Home Depot is before the California Supreme Court, and employer advisories now urge paying exact minutes. Avoid rounding meal periods entirely.
Washington & Oregon (trend against rounding): A Seattle jury in 2024 awarded about $98 million to Providence employees, with meal-break and rounding issues central to the case—later subject to statutory doubling under state law. Regional guidance and verdicts signal that rounding is disfavoured.

There’s no UK “7-minute rule”; focus on accurate hours for National Minimum Wage (NMW) and Working Time Regulations (WTR) compliance.

What matters in the UK

UK law does not recognise a grace-minute rounding rule. Employers must ensure recorded hours are accurate for NMW and rest entitlements under the WTR. HMRC’s NMW Manual (updated April 2025) stresses precision in calculations and warns against rounding that affects pay outcomes. Acas guidance focuses on correct working time and rest, not punch-rounding.

Practical takeaway for managers

If time data is minute-accurate, pay to the minute. Keep clear records of hours worked, breaks, and approvals to evidence NMW and WTR compliance. Avoid any rounding that could reduce pay or mask short breaks. Use regular checks to confirm paid hours match worked hours.

How to run a rounding neutrality audit (30-minute method)

In one line: Prove your rounding “averages out” for each employee, or switch to minute-accurate pay.

What “neutral” means

Under the FLSA, rounding to the nearest 5, 6 or 15 minutes is tolerated only if it does not, over time, deny pay for hours actually worked. The common “1–7 down / 8–14 up” example is guidance, not a grace-period law. Your audit’s goal is to evidence that neutrality.

30-minute audit, step by step

Set the period (e.g., last full payroll cycle). Audit per location/department if large.
Export two datasets for the same period:
1. “Actual” punches to the minute (in/out + breaks).
2. “Paid” time after rounding and approvals. (Most systems store both.)

Compute per-employee deltas: (paid minutes – actual minutes). Add totals for the period and count how many days each person rounds up vs down.
Flag patterns: Any employee with a net loss > 10–15 minutes per pay period, or teams where >50% of staff show net losses, deserves investigation. (Neutrality should “average out”, not lean one way.)
Spot red flags: rounding applied to meal periods (high-risk in CA), chronic early “grace” work, or auto-deducted breaks. If found, fix policy or disable rounding.
Document outcomes: Save the audit spreadsheet, a short summary, and any policy changes. Re-run after roster or policy changes and at least quarterly.

What to calculate and when to worry:

Metric	Why it matters	Investigate when…
Net minutes gained/lost per employee	Shows if rounding disfavors individuals.	Net loss is consistent (e.g., >10–15 mins per pay period).
% of days rounding up vs down	Neutrality should balance across days.	<40% “up” days across the team.
Meal-break rounding present?	CA prohibits rounding for meals.	Any rounding touches meal punches.
Team-level net effect	Detects “systemic” disadvantage.	Majority of team shows net losses.

✅ Manager checklist (use in your SOP)

Keep rounding off for meal periods and any jurisdiction that disfavors rounding.
Retain raw punch data and paid time for the same period.
Audit quarterly and after scheduling or system changes.
If neutrality fails, switch to exact minutes: especially in CA/WA/OR or healthcare, where recent cases have raised exposure.

How Shiftbase supports safe, practical time rounding

Shiftbase combines employee scheduling, time tracking, and absence management so you can either switch to exact-minute pay or keep strictly neutral rounding where it’s still appropriate. You can pick a rounding interval (1–30 minutes) and specify how clock-ins and clock-outs are handled, per department if needed.

What you can configure in minutes:

Rounding behaviour: round up, down, or to nearest; set different rules for first/last punch.
Punch-clock controls: use scheduled start/end, handle split shifts, auto-approve where policy allows, or turn rounding off entirely.
Audit evidence: export “actual vs paid” reports to CSV/Excel from the Reports area for neutrality checks and payroll reconciliation.
Timesheet governance: enable approvals and time-interval settings centrally to keep a clean audit trail.
Leave alignment: manage absence policies and approvals alongside worked time, so rounding never masks breaks or minimum-wage risks.

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Frequently Asked Questions

No. It’s a rounding example inside federal guidance. Rounding is allowed only if it is neutral and, over time, does not short-pay staff.
Nearest 5, 6, or 15 minutes—but only if the practice averages out for employees and doesn’t always benefit the employer.
Avoid it. In California, the Supreme Court held employers cannot round meal-period punches and that records showing short or late meals create a rebuttable presumption of violations.
Usually no. If your tech records to the minute, rounding adds risk with little benefit—especially in CA and the Pacific Northwest, where juries and regulators scrutinise rounding alongside break compliance.
At least quarterly and after any process or roster change. Keep a simple “actual vs paid” report per employee to prove neutrality if audited.
No. UK compliance focuses on accurate hours for National Minimum Wage and Working Time Regulations, not grace-minute rounding.