Under the Fair Labor Standards Act (FLSA), an employer can use any timekeeping method he chooses as long as it is accurate and complete. Most employers require their hourly employees to complete weekly time sheets, either by hand or via punching or swiping a time clock. Generally, the time clock or the employee will state the exact hours and minutes worked. In order to pay the employee correctly, the employer must convert the minutes.
Calculate minutes when the time falls on the quarter hour. For example, if the employee worked 8:15 a.m. to 5:15 p.m. with an hour of unpaid lunch, Monday to Friday, pay him for eight hours each day, which equals 40 hours for the week. When the time sheet indicates the employee's time based on the quarter hour, it is easy to calculate the minutes because no rounding is necessary.
Round minutes to the nearest quarter hour. For instance, say the employee's time card states 8:09 a.m. to 5:05 p.m. with an hour for unpaid lunch, Monday to Friday, round up 8:09 a.m. to 8:15 a.m. and round down 5:05 p.m. to 5 p.m. Therefore, he should be paid 40 regular hours and 15 minutes of overtime. If rounding causes an employee's time to result in overtime pay, he should be paid at the overtime rate for the additional time.
Convert minutes to decimal parts of an hour. Convert as follows: 15 minutes = .25; 30 minutes = .50; 45 minutes = .75; and 60 minutes = 1 hour. For instance, if the employee works 7:30 a.m. to 12:45 p.m., his total hours worked is 5 hours and 15 minutes. After the conversion, his hours would be expressed as 5.25 hours.
Payment can then be calculated by multiplying the hours worked expressed in decimal form by the rate of pay per hour. Multiply any hours (expressed in decimal form) that were overtime (hours worked over 40) by the overtime pay rate and then add that amount to the amount earned for working 40 hours.