Rounding is a system that some employers use to calculate the amount of time that an employee works. A rounding system is used to calculate compensation for hourly employees. For example, if the rounding system rounds to the nearest quarter hour in seven minute increments an employee could win or lose depending on the pattern of clocking in and out. Under this hypothetical, if a shift is scheduled to start at 7 a.m. and the employee clocks in at 6:53 a.m., the punch would round forward to 7 a.m. and the employee would lose 7 minutes of work. Conversely, if the employee clocks in at 7:07 a.m. for a 7 a.m. start time, the punch would round back to 7 a.m. and the employee would benefit under the rounding system.
A rounding system must be both neutral “on its face” and “as applied”. A rounding system is neutral “on its face” if it automatically rounds time to the benefit of the employees in the same manner that it rounds time to the benefit of the employer.
A rounding system is neutral “as applied” if, over time, it does not undercompensate or overcompensate employees, on average. A neutral rounding system does not have to balance out gained time and lost time equally. In evaluating the neutrality of a rounding system “as applied” it is appropriate to look at the effect of the rounding on all of the employees across a company. It is also appropriate to consider the effect of rounding on individual employees, if their experiences differ substantially from the average. It is also appropriate to consider what factors, if any, cause employees to clock in or clock out early or late. For example, a tardy policy that imposes consequences for clocking in late, would be an example of a reason that employees clock in early. Workload and lack of staffing is another consideration. If an employer penalizes overtime, that is a factor to consider in terms of employee habits regarding clocking in and out.
Over time, a rounding practice that is used by an employer can end up benefiting the employer and fail to compensate its employees for all their hours worked. If this occurs, it could impact no only straight time wages but overtime as well. If your employer utilizes a rounding system and you believe you are not being compensated for all of your time worked, you have rights.
Schedule a free consultation with Salusky Law Group to discuss your concerns.