A Home Depot employee counted 470 hours of unpaid wages due to the home improvement retailer’s chosen time clock rounding scheme. Despite improvements in the ability to “practically ascertain” the actual time worked by employees, Home Depot has continued to use the 15-minute rounding system for years.
Time clock rounding ostensibly evolved to ease payroll calculations. Hold up. Those green-visored bookkeepers hunched over ledgers are images from days gone by.
In today’s businesses, slick proprietary software calculates wages, withholding, overtime, deductions and divides total time worked into regular time and overtime. Algorithms track time across a shift, a week, a year. Firm-wide or single location. Comparing shifts week to week, this day last year, last Labor Day Sale. Forecasting employee hours for next week, next Saturday, next year’s Labor Day Sale.
Payroll can be efficiently and affordably outsourced to firms that specialize in business informatics; producing paychecks in the time it takes an HR manager to switch gears.
Is it even legal to round away the time actually worked?
According to The Fair Labor Standards Act (FLSA) an employer may round time in one of three ways: 5 minute, 15 minute, or 6 minute increments – which is also one-tenth of an hour. It also allows the rounding away of singular events. The FLSA website mentions the time spent after clocking in; being reassigned, relocating tools to the new worksite, then needing to go home sick and clocking out before any work commences. This employee was not paid for that time.
However, FLSA also states that an employer may not arbitrarily fail to count any part, however small, of working time that can be practically ascertained. This is where Home Depot lost the case. The 470 hours of unpaid time could, in fact, be practically ascertained.
FLSA expects employers to audit their time clock rounding. FLSA expects a rounding program to fully compensate an employee for time worked. Using the definitions and expectations of FLSA, this Home Depot employee won their outstanding wages.
If time clock rounding has reduced your hours worked to less than actual, contact our experienced attorneys who will work to restore your lost wages.