The 'Dos' and 'Don'ts' of Rounding--How Does Your Policy Measure Up?

"7 But, "an employer may violate the FLSA minimum wage and overtime pay requirements if the employer always rounds down."s Conversely, policies that "round up" or "round down" to the nearest time increment are likely to be upheld.9 Specifically, the Department of Labor instructs that, if employers round to the nearest 15-minute increment, "[e]mployee time from 1 to 7 minutes may be rounded down, and thus not counted as hours worked, but employee time from 8 to 14 minutes must be rounded up and counted as a quarter hour of work time. "13 Accordingly, the court denied the employer's motion for summary judgment, which sought to establish that its practices were lawful as a matter of law.14 In other cases, employees have alleged that an otherwise lawfully drafted rounding policy nevertheless unfairly deprives them of compensable wages in practice. "16 In contrast, when the evidence demonstrates the application of the rounding policy has, in the long run, deprived employees of receiving compensation for time actually worked, the employer may be subject to liability.17 In Eddings, a collective action composed of call center employees from 14 different locations spanning 11 states, the plaintiffs offered expert analysis contending that collective action members were uncompensated for a net total of 6,379 hours during the relevant time period.18 The defendant offered competing expert analysis suggesting approximately 60 percent of the employees did not experience a net loss of pay as a result of the rounding policy.19 The court noted, however, that "[t]he obvious corollary statistic is that approximately 40 percent of workers did experience a net loss of pay. Employers may also head off costly litigation-which commonly appears as a "hybrid" of a Rule 23 class action and a Fair Labor Standards Act collective action, and may be nationwide in scope-by periodically auditing payment records to ensure their employees are not being denied wages at a rate that is out of proportion to the time the employees actually report working.