The Fair Labor Standards Act (FLSA), which the U.S. Department of Labor administrates, requires that employers compensate nonexempt employees for all hours worked. If your hourly employees use a time clock, the device might record the precise time the employee punches in and out. Because employees don’t always clock in and out at the exact hour mark, you may have to figure out the minutes that occur in between the hour, especially if your employees use a military time clock. A definitive way of calculating payroll minutes is via the six-minute incremental approach.

Figure military time by keeping in mind that military time continues serially instead of repeating hours up to midnight and resetting at midday. For example, 12 noon is 1200, 1 p.m. is 1300, 2 p.m. is 1400, 3 p.m. is 1500, 4 p.m. is 1600 and 5 p.m. is 1700. After midnight, the hours repeat themselves; after midday, they stop repeating. For example, 8 a.m. is 800 and 4:30 p.m. is 1630.

Apply the incremental approach that pays employees in six-minute increments. Each six-minute increment equals 1/10th of an hour, or 0.1 hours. For example, 9:18 a.m. is 9.3 and 1530 p.m. is 3.5; the minutes are divided by six.

Make a chart that shows an hour’s time in six-minute increments to help you understand the flow, if necessary. For example, .1 equals 6 minutes, .2 equals 12 minutes, .3 equals 18 minutes, .4 equals 24 minutes and .5 equals 30 minutes, .6 equals 36 minutes, .7 equals 42 minutes, .8 equals 48 minutes and .9 equals 54 minutes.

Calculate daily time card hours and minutes. For example, the employee clocks in at 8:36 a.m., takes 30 minutes for lunch and leaves work at 4:30 p.m., which is 1630 in military time. When you factor in the six-minute increment equation, you respectively get 8.6 and 16.6. Subtract 16.6 from 8.6, which equals 7.9. Then, deduct 30 minutes, or .5, for lunch, which leaves 7.4 hours for the day. This is an error-free way of calculating payroll time, as the employee is paid for all time worked.

Tip

The U.S. Department of Labor allows employers to round employee’s time up and down to the nearest quarter hour. If you choose to use this method, round down times from one to seven minutes, and round up times from eight to 14 minutes. For example, round 8:03 a.m. down to 8 a.m. and 4:12 p.m. up to 4:15 p.m. Note that this method might result in the employee slightly gaining or losing minutes. It’s not as precise as the incremental approach, but it’s acceptable if done properly.