Well-Rounded Timekeeping: Are You Compliant
Tracking employee time and ensuring your organization’s payroll is accurate is what time clocks do. Sometimes, however, employers have rounding or grace period policies that change an employee’s clock-in or clock-out time. It is common for employers to allow slight adjustments so that calculating pay is easier. Take rounding to the nearest 15-minute increment as an example: if an employee clocks out at the end of the day at 4:58 PM, the employer rounds that to 5:00 PM to make it easier to calculate employee time.
This example is perfectly compliant to the Fair Labor Standards Act, “provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.”
Unfortunately, it’s not always that simple. Many states have their own laws regarding employee timekeeping and rounding, and there are plenty of federal rules on top of that.
Timesheet rounding must be neutral or favor employees, never employers.
Basically, employers cannot always round employee time down.
While 15 minutes is the maximum rounding increment, employers must obey the 7-minute rule.
An employee who clocks in at or before the seven-minute mark gets their time rounded down, but if they clock in after the seven-minute mark, their time rounds up. For instance, if an employer is rounding in 15-minute increments, an employee who clocks in at 8:07 gets their time rounded down to 8:00. Likewise, an employee who clocks in at 8:08 gets their time rounded up to 8:15.
The California Supreme Court recently ruled about employee time rounding, saying that employers in the state are prohibited from using time rounding for meal breaks. In California, employees must receive 10-minute rest breaks, along with a 30-minute unpaid meal break for every 5 hours of work that has to take place before the end of the fifth hour. If the employer does not provide a meal period, they must give one hour of premium pay for each day when the rule was not followed. An employee in the California Supreme Court case claimed that they did not receive premium pay due to rounding practices: if they actually only took a 25-minute break, the rounding boosted the break to 30 minutes.
Lunch breaks may or may not be required by law, and how that time is treated for time and compensation is regulated.
Other laws that vary by the state are the break and lunch (paid and unpaid) requirements for hourly workers. Another interesting part of the Fair Labor Standards Act (FSLA) is that the federal law does not require a lunch break, but it does address compensation for time off for meals during the workday. The FLSA says that if an employee is required to be available for work while eating lunch, then the lunch period must be compensable time and cannot be deducted from hours worked.
Here is the current list of states that require lunch breaks for employees:
One easy way to make sure your organization is in compliance with labor laws and timekeeping regardless of the location or the number of employees and work sites is to use a timekeeping solution. LightWork® Software's Time & Attendance solution ensures accurate timekeeping.
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