Workers have basic rights under Indiana state statutes and federal law. Sometimes, their employers try to violate those rights. For example, some employers have no-overtime policies. They may then try to justify refusing to pay workers for time already worked. Such conduct is a violation of an employee’s rights if they have worked more than 40 hours in a particular workweek.
The Fair Labor Standards Act (FLSA) establishes several important protections for hourly workers. Anyone paid based on how long they are on the job should receive pay for the time that they work and overtime pay when appropriate. Their employers should not try to deny them wages for work that they have performed for a company. One of the payroll practices that can leave workers questioning whether the company violated their rights involves time clock rounding.
Can employers round the amount of time worked per shift when calculating what to pay their workers?
Time clock rounding can be legal
Under the FLSA, employers can justify having workers perform certain job functions off the clock. The de minimis rule allows a company to have workers perform certain functions before a shift begins or after it ends, provided that those functions require a negligible amount of time.
Similarly, companies can use time clock rounding as a means of streamlining the payroll process. Historically, calculating the time worked down to the minute or second could be very demanding work. Companies can simplify the process by paying their workers in increments other than minutes or seconds.
However, the FLSA imposes two key restrictions on this practice. The first and arguably most important is that the company must apply rounding practices neutrally. The company should round up or down as appropriate based on the amount of time worked. Evidence that the company consistently rounds down and avoids rounding up could help prove that the company has violated the rights of employees.
Similarly, the company needs to use reasonable time increments. Under the FLSA, the largest pay increment companies can use is 15 minutes. Paying workers in 20-minute increments or half-hour increments could constitute a violation of their wage rights.
Reviewing company practices with a skilled legal team can help frustrated workers determine if they may have experienced an actionable violation of their wage rights. Workers who have not received their wages in full as they deserve due to inappropriate time clock rounding may have grounds to pursue an employment lawsuit to request their unpaid wages.
