In recent years, companies and public institutions across the United States and beyond have increasingly relied on automated timekeeping systems to manage employee hours, reduce human error, and streamline payroll processes. One of the most widely adopted solutions in this realm is UKG (Ultimate Kronos Group), a major provider of workforce management software. While UKG is trusted by thousands of organizations globally, a specific rounding policy flaw in its timekeeping module has come under scrutiny for miscalculating overtime pay. This issue has prompted internal reviews, legal concerns, and ultimately, corrective action through a policy override designed to halt further overpayments.
TLDR: What You Need to Know
A recent discovery revealed that UKG’s automated timekeeping software incorrectly calculated overtime due to a flaw in its minute-rounding rules. Specifically, the system sometimes rounded employee timeclock entries in a way that falsely inflated hours worked, resulting in unwarranted overtime payments. Organizations using UKG faced unexpected payroll overages until the issue was identified. A policy override has since been implemented to enforce stricter rounding rules, effectively avoiding further overpayments.
Understanding Timekeeping Rounding
Time rounding in workforce systems is a common feature used to simplify payroll calculations. It usually operates on a minutes-based rounding increment, such as rounding to the nearest 5, 10, or 15 minutes. For example, if an employee clocks in at 8:03 AM, a 15-minute rounding rule might record their start time as 8:00 AM.
This process is generally accepted when applied consistently and fairly. U.S. Department of Labor guidelines state that rounding is permissible provided it does not consistently favor either the employer or employee. However, deviations from neutrality can result in compliance violations and financial discrepancies.
The UKG Rounding Flaw
The root of the issue within UKG stemmed from how the software interpreted cumulative in-and-out punches over a day or week. Rather than evaluating timeclock entries on an individual basis with balanced rounding, the system skewed toward rounding in favor of employees when:
- Clock-ins occurred slightly before scheduled times
- Clock-outs happened slightly after the end of the shift
- Meal breaks were inconsistently deducted or overstated
This accumulation of minor timing advantages led to a significant number of instances where employees were credited with overtime pay without surpassing the statutory or organizational thresholds.
Real-World Impact of the Flaw
In practice, affected organizations started to notice discrepancies in payroll expense reports and labor cost summaries. Internal audits revealed that certain teams, especially in departments with frequent shift changes and clock activities (like healthcare, manufacturing, and logistics), showed higher-than-anticipated overtime payouts.
Some employees were reportedly paid for 40.1 or 40.2 hours in a workweek, which automatically triggered overtime pay for these fractional hours—even when there was insufficient actual work beyond a full-time week to justify the additional payment.
In one widely cited internal review at a mid-sized healthcare provider in the Midwest U.S., overpayments due to the rounding discrepancy added up to nearly $50,000 over six months. This realization prompted questions about liability and methodical weaknesses in the payroll-processing chain.
Legal and Organizational Risks
The implications of payroll miscalculations extend beyond budgetary annoyance. They pose:
- Compliance Risks: Errors in wage and hour compliance can attract fines and audits by the Department of Labor.
- Employee Relations Concerns: Discoveries of overpayments followed by employee clawbacks may damage trust and morale.
- Reputational Damage: Repeated payroll errors can tarnish the credibility of HR and finance departments.
UKG’s clients, which include major hospitals, enterprises, and public entities, voiced frustration at the timekeeping flaw, particularly because it stemmed from default configuration settings that were not thoroughly explained during onboarding.
The Policy Override Solution
After months of investigation and mounting pressure from affected partners, UKG rolled out an optional policy override aimed at mitigating the rounding flaw. The new override allowed system administrators to implement stricter rounding parameters and enhanced checks for pre-overtime eligibility. Key features of the override include:
- Time Threshold Controls: Ensure overtime is triggered only after a full 40 hours are auto-verified within the system.
- Meal Break Reconciliation: Improved tracking to ensure uninterrupted breaks are accurately subtracted.
- Audit Logging Enhancements: Robust tracking of rounding rules, with greater administrative oversight.
Following implementation, numerous clients noted immediate reductions in unexpected overtime charges. The override helped restore balance in rounding applications by enforcing neutrality in time adjustments.
Internal Policy and Configuration Adjustments
In addition to applying the UKG-provided override, organizations were advised to review and adjust their own internal rounding policies. Best practices that emerged from this episode include:
- Weekly checks for employees consistently clocking just over 40 hours
- Transparency with employees regarding how time is calculated and audited
- Quarterly audits of the timekeeping system and policy compliance
- Training for supervisors on monitoring accurate punch behaviors
Final Thoughts: Vigilance and Accountability
The UKG timekeeping rounding issue is a cautionary tale for modern workforce management. While automation offers efficiency and scalability, the onus remains on organizations to ensure system configurations are aligned with regulatory standards and internal fairness goals. Even highly reputed platforms can produce flawed outcomes when default settings go unchecked.
Moving forward, the emphasis must not just be on fixing discovered errors but also on early detection protocols, rigorous testing of system updates, and transparent collaboration between payroll providers and clients. Trust in timekeeping software is paramount, and that trust is earned through constant vigilance and proactive accountability.