Are employers allowed to “round” an employee’s starting and stopping times when they punch in and out on a time clock?
Yes. The Department of Labor (“DOL”) has taken the position that it will allow employers to round an employee’s starting and stopping time “to the nearest five minutes, or to the nearest one tenth or quarter of an hour.” 29 C.F.R. § 785.48. In order to take advantage of rounding, however, the employer must ensure that the practice of “computing working time . . . will not result in, over a period of time, any failure to compensate employees properly for all of the time they actually worked.” This means that the rounding of time cannot merely benefit the employer; the time must be rounded to both the benefit and disadvantage of the employee. For example, assume an employer rounds to the nearest quarter hour, and an employee who is scheduled to start at 8 a.m. punches in at 7:51 a.m. The employer must round the time back to 7:45 a.m., and pay the employee for this time, even though he didn’t work it. Conversely, however, if the employee punches out at 4:07 p.m. for a shift that was to have ended at 4:00 p.m., the employer is allowed to round the employee’s time back to 4:00 p.m., and not pay the employee for the additional 7 minutes. This rounding would benefit the employer, but disadvantage the employee. Rounding in this manner is essentially a “wash”, and is permissible.
For more information, please contact Mitchell W. Quick, a partner in Michael Best's Labor and Employment Relations Practice Group at 414.225.2755, or firstname.lastname@example.org.