On March 08, 2019, Steve Holden blogged on the dangers of time rounding policies for your business. The blog is located here.
The premise of the blog was that an appellate court validated an employer’s use of time rounding, because in this particular situation there was no violation of law. The court noted that “California law requires that rounding policies be fair and neutral on their face and in practice, meaning that the policy can’t result in a failure to pay employees for all the hours they work.”
The issue with time rounding arises because our employees are more conscientious than we like to give them credit for when it comes to punching in and out. The truth is, in my review of hundreds of time cards, the much likelier scenario is the one we have displayed below. The time card is a recreated actual time card I recently reviewed for a client. As you can see, the employee was always clocking in a few minutes early, and clocking out on time, or shortly after the shift was over. This resulted in 45 minutes of unpaid time during a single pay period, far from de minimis, and resulted in failure to pay the employee for all hours worked.
As Mr. Holden pointed out, “With modern technology there is little reason for most employers to utilize rounding. For those that do, it is critically important to audit the records carefully to ensure that employees are not underpaid by the practice.”
If you have read this article and feel you may have a process or procedure that has resulted in underpayment, please contact one of our professionals today to discuss your options.