We have a policy of
rounding employees’ hours within a 10-minute window. For example, if an employee
clocks in up to 5 minutes early for an 8 a.m. shift, we round up to 8 am. If an
employee punches out a couple of minutes before or after 5 p.m., we round that
out to 5 p.m. Is what we’re doing legal?
– Barbara in
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
The U.S. Department of
Labor (DOL), which enforces the Fair Labor Standards Act, permits employers to
round when calculating an employee’s work time. The DOL’s position, which is spelled
out in a regulation, is also followed by the
The regulation states:
“It has been found that in some industries, particularly where time clocks are
used, there has been the practice for many years of recording the employees’
starting time and stopping time to the nearest 5 minutes, or to the nearest
one-tenth or quarter of an hour. Presumably, this arrangement averages out so
that the employees are fully compensated for all the time they actually work.
For enforcement purposes this practice of computing working time will be accepted,
provided that it is used in such a manner that it will not result, over a
period of time, in failure to compensate the employees properly for all the
time they have actually worked.” The DOL regulation (29 C.F.R. 785.48(b)) is
available online at www.dol.gov/dol/allcfr/Title_29/Part_785/29CFR785.48.htm.
So, keep in mind that
even though the DOL permits rounding, the rounding must average out so that the
employee gets paid for all time he or she worked. For example, if the employer
has a practice of rounding to the nearest quarter of an hour, employees who
clock in for an 8 a.m. shift between 7:45 a.m. and 7:52 a.m. would be paid
starting at 7:45 a.m.; employees who clock in between 7:53 a.m. and 8:00 a.m.
would be paid starting at 8:00 a.m. Then, the same would happen at the end of
the shift. Rounding in this scenario works both ways, sometimes in the
employer’s favor and sometimes in the employee’s favor. Over time, the
differences average out, so this method of rounding is permissible.
Here’s an example of a
rounding practice that would be problematic: An employee who clocks in at 6:46 a.m.
is paid starting at 7:00 a.m. and an employee who clocks in at 7:14 a.m. is
paid starting at 7:00 a.m. In this example, the rounding indeed works both
ways, sometimes to the employer’s advantage, sometimes to the employee’s. The
problem, however, is that the rounding is to the nearest half hour, not quarter
hour—and the DOL regulation authorizes rounding only to the nearest five
minutes, 10 minutes, or quarter of an hour. Thus, this rounding policy would
likely run afoul of federal and state law. It is the practice in some
industries, particularly where time clocks are used, to record employees’
starting and stopping times to the nearest 5, 10, or 15 minutes. As long as
employees are on average properly compensated for all the time they actually
worked, this practice will be accepted.