California Labor and Employment Defense Blog

Seemingly Neutral "Rounding" Rules May Systematically Shortchange Workers

Many companies use time keeping systems (such as the market-leading Kronos software) that "round" employee time entries to the nearest quarter-hour.  For example, if an employee clocks in at 8:53 a.m., the system will credit him as starting work at 9:00 a.m.  On the other hand, if he had started work at 8:52 a.m., the system will typically round the other direction giving him credit as having started work at 8:45 a.m.

Most employers assume that the rounding works in both directions and will just average out over time.  But when other workplace rules are in effect, the rounding can be systematically skewed.  

For example, employers who follow rigid scheduling regimes often set their timekeeping software so that employees are "locked out" and cannot clock in more than seven minutes before their scheduled start time.  This ensures that the rounding will inevitably operate in one direction only.  This effect may be further compounded by policies requiring employees to arrive at work at least ten minutes before their shift begins.      

These minutes can add up, especially as they will often be compensable at time-and-a-half overtime rates when added back into the total hours worked.  By losing just seven minutes per day to rounding a full time worker could be owed nearly 30 hours of overtime by the end of the year.  Over a four-year statute of limitations this is nearly a month of uncompensated work.

The bottom line is that workers and employers should pay close attention to these small timekeeping details, which are too often ignored on the theory that they involve only negligible amounts of time.        

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