Answers to tricky HR questions: The regs on rounding workers’ hours
October 27, 2009 by Jim GiulianoPosted in: Employment law, FLSA, In this week's e-newsletter, Latest News & Views, Pay and benefits, policies
Our team of experts fields real-life everyday questions from HR managers and gives practical answers that can be applied by any HR pro in the same situation. Today’s question: What does the Fair Labor Standards Act say about rounding hours up or down?
Question:
We just made the switch to an electronic timekeeping system for our nonexempt staff, and we’ll be rounding off hours worked, for pay purposes. Is there a rule about how to go about doing that?
Answer:
There is a rule, and it’s a bit complicated, says employment-law attorney Molly DiBianca.
Under the Fair Labor Standards Act, you’re allowed to round off workers hours as long as the rounding doesn’t always favor the employer. In other words, over the course of time, the rounding should average out.
Specifically, the FLSA permits rounding employees’ “starting and stopping times to the nearest five minutes, or to the nearest one-tenth or quarter of an hour.”
A suggested approach: Round up and down based on a set increment. So, for instance, if a worker reports in at 8:38, start pay at 8:45. But if a worker comes on at 8:37, start pay at 8:30.
Tags: fair labor standards act, FLSA
November 2nd, 2009 at 9:43 am
If my employees’ schedule is 9-5 and they stamp in on our new web based program at 8:50am, can we legally round it to 9am?
November 2nd, 2009 at 11:04 am
No, by 1/10th of an hour they mean every 6 minutes as 6 times 10 equals 60 so if they clocked in at 8:50am you would have to start them no later than 8:55am which is still within the 1/10 of an hour timeframe. Once you hit 8:56 then you have started another 1/10th of an hour.
November 2nd, 2009 at 12:12 pm
Yes you can. This is “waiting to be engaged” – just make sure they aren’t doing any work during that 10 minutes.
November 3rd, 2009 at 8:31 am
This makes me think that a practice of rounding up when an employee starts (7:56 = 8:00) but rounding down when an employee stops (4:34 = 4:30) would not be compliant, because this always favors the employer – is this correct?
November 3rd, 2009 at 10:02 am
Our payroll is calculated in 15 minute increments and we follow the DOL 7/8 minute rule. Which mean we round down 7 minutes our less to the next lowest quarter hour and round up 8 minutes or more to 15 minutes (the next highest quarter hour). Like the article said the important part is that it doesn’t always benefit the employer and we follow it consistently so there is no perception of pay variances.
November 4th, 2009 at 2:38 pm
Christine – The rounding need to be based on consistent rules set up in your system. For example, if you round in quarter-hour 15 minute increments, then 8:50 would round to 8:45. And you cannot arbitrarily round differently for this person or this one punch. However, the person only needs to be paid for hours worked. If he/she shows up for work 10 minutes early and sits with a cup of coffee not working, you can CORRECT the start time to the actual start time of 9:00. If he/she actually starts working at 8:50, then he/she needs to be paid according to the rounding rules you have established. (Also note however, while you have to pay the employee for hours worked, you can discipline the employee for unauthorized overtime, if you have a policy that states overtime needs to be approved.)
E.R. – The idea is that you’re time punch is within that “leeway” on either side of the start or end time. So, it is OK to round 7:56 to 8:00 as long as you also round 8:04 to 8:00. The same with 4:34 = 4:30 = 4:26. When we implemented a system like this, our attorneys said the round up and down is fine, however you cannot discipline an employee for showing up late or leaving early within that leeway time, otherwise you are creating a system that favors the employer. So for example, if you round in 15 minute increments, anything betweel 8:00 – 8:07 would round down to 8:00. If the employee arrived at 8:07 or earlier, he/she couldn’t be disciplined for showing up late, but 8:08 or after could be considered a “late” punch.