There are many ways for businesses to control their staffing expenses. Cautious scheduling to avoid overtime is one strategy. Moving highly-productive workers to salary work arrangements can also be beneficial. Companies may also utilize somewhat creative payroll practices in an effort to control operating costs and potentially manage staffing expenses at the same time.
Payroll professionals have to calculate the exact amount of time that employees are on the clock to ensure that they receive appropriate wages. Some companies try to streamline the process of calculating wages by paying workers in larger increments. It is substantially easier for professionals to calculate wages when employees receive pay in five, 10 or even 15-minute increments.
Is it legal for companies to round time worked up or down when calculating wages?
Time clock rounding remains a common practice
As previously mentioned, employers have long calculated pay in increments greater than individual minutes to make the process easier for payroll professionals. The company has to consistently use the same increment of time and must employ a neutral approach to rounding the time an employee works to remain compliant with federal wage regulation.
If an hourly worker was on the clock for six hours and three extra minutes, then the company should round up if it pays in five-minute increments. If the employee only worked one minute of the final five-minute increment of their shift, then it is reasonable to round down.
In scenarios where it becomes apparent that companies favor rounding down over rounding up, workers could claim that the company uses time clock rounding as a way to diminish the wages they pay their employees. Such practices might constitute a violation of wage regulations.
Employees who suspect abuses of time clock rounding may need to request records from their employers and start maintaining their own records as well. Doing so can help show a pattern of inappropriately reducing the amount of time for which workers receive pay.
Recognizing some of the more subtle ways that employers might violate workers’ rights can help employees assert themselves. Workers denied pay in full for the time they have worked may have grounds to pursue wage and hour claims against their employers.
