You work hard and deserve to be paid for the full amount of time you work. Unfortunately, some employers engage in unscrupulous tactics to avoid paying workers the wages they are lawfully entitled. For instance, improper time clock rounding when done over a period of time can substantially impact the amount of your overall pay. If a company’s rounding policy does not comply with the federal Fair Labor Standards Act (FLSA) and state law, you may be entitled to take legal action to recover the wages you were denied for the time you worked.
Many employees use electronic time clocks, written time sheets, swipe machines, and other attendance systems to document the time they punch in and out of work. Time clock rounding is the practice of rounding up or down the hours an employee worked. While these types of policies can be used by employers to streamline payroll processes or recoup money lost as a result of short breaks, it can violate the FLSA in some cases.
Time clock rounding is improper and becomes an illegal practice when it deprives employees of the pay they legally earned for the time they worked. Simply put, when time clock rounding financially benefits an employer — and harms the employee — it is against the law.
Under federal law, an employee must be paid for the total amount of hours worked. However, improper rounding policies can result in a worker losing a significant amount of wages to which they are rightfully entitled, including overtime pay. When a time clock rounding policy is not neutral and has the effect of only benefitting the employer, it is likely in violation of the law.
Typically, time clock rounding is impermissible under the following circumstances:
In addition, employers are prohibited from editing an employee’s hours by changing the start and end times to those associated with their actual shift when an employee spent time working before or after the scheduled shift. Whether the employer tracks hours using written time sheets or a computerized system, reducing work hours is illegal when it causes an employee to receive less wages than the amount owed for the time worked.
Time clock rounding is permitted in certain situations for hourly employees. Not only are such practices common, but it is legal for employers to use rounding policies as long as they comply with the FLSA. Specifically, the rounding system must be fair and result in the time rounding averaging out so that employees are fully compensated for the full amount of time they have worked.
In the event an employer uses a rounding policy, the start and end times punched into the time clock must be rounded to the nearest fifteen minutes or less to satisfy the legal requirements of the FLSA. For example, policies that round to the nearest five minutes, one-tenth of an hour, or one-quarter of an hour are permitted. However, when an employer rounds to the nearest 15 minutes, the cut off for rounding down is at the seven-minute mark. A policy that rounds to the nearest half-hour would be in violation of the FLSA.
If a time rounding policy uniformly rounds to the same time interval each time an employee punches in and out, it will generally meet the FLSA criteria. For example, suppose you use a time clock when you start and end your work shifts, and your employer uses a rounding policy that rounds both your clock-in and clock-out times to the nearest five minutes. This would likely be permitted under the law as long as the system works equally in favor of both the employer and employee.
If your employer’s time clock rounding policies violated the FLSA, you could lose wages each day that accumulate to thousands of dollars over the course of time. In such cases, it’s crucial to have an experienced attorney by your side who can assist you with recovering the wages that are legally yours. Located in Westlake, employment law attorney Chris Lalak offers skillful counsel to employees who have suffered wage loss due to an employer’s illegal policies and is committed to obtaining the best possible outcome in every case. Contact Lalak LLC today to schedule a free, confidential, no-obligation consultation and learn how we can help.