A case from outside Georgia serves as a useful reminder to employers and employees alike regarding the Fair Labor Standards Act’s rules regarding “rounding” time a worker works each day. The overarching concept that you need to know is this: if an employer’s rounding policy results in an outcome where, over time, workers are not compensated “properly for all the time they have actually worked,” then that policy may represent an FLSA violation. If you have questions about a time rounding policy, make sure to get reliable answers by consulting an experienced Atlanta wage and hour lawyer.
The recent case involved a Kansas City-based health system and a large class of its workers. The health system used a popular computer software-based timekeeping system, Kronos Workforce Timekeeper.
The employer had a rounding policy where a “clock-in” or “clock-out” that occurred within six minutes of the scheduled shift start or end time was rounded. In other words, a worker who clocked in at 8:04 for an 8:00 shift was paid as if she arrived at 8:00. Similarly, a worker who clocked out at 6:05 for a shift ending at 6:00 was paid as if she left at 6:00.
The law is clear that if an employer uses a “head we win, tails you lose” rounding policy, that employer has potential liability. (Specifically, if the employer’s rounding system reduces workers’ pay for clocking in slightly late or out slightly early, but does not compensate workers who similarly clock in early or out late, that runs counter to the requirements of 29 CFR Section 785.48.)
Facially Neutral but Not Neutral in Practice
The Kansas City case was different. In that lawsuit, the employer’s rounding system was facially neutral. Every six-minute or smaller deviation from the scheduled start or stop time was rounded… whether that specific rounding benefited the worker or the employer. As the workers’ lawsuit in this case revealed, even that kind of facially neutral rounding policy can run afoul of the law.
The workers presented expert evidence that, although the rounding policy was neutral on its face, it was not in practice. The expert’s review of six years’ worth of time records showed that the policy “cut time from about half of shifts, added time to a little over a third, and had no effect on the rest.” This had the impact of failing to adequately compensate roughly 2/3 of the workers. Over the six-year period the expert reviewed, workers worked approximately 74,000 hours for which they did not receive compensation.
For example, the expert reviewed the time records of the lead plaintiff, T.H., and found that she lost time on approximately half of her shifts and gained time on only about 1/5 of her shifts.
The appeals court, in siding with the workers, concluded that courts must assess whether an employer’s rounding system fairly averages out over time. The health system workers’ evidence — showing that, over a period of years, they consistently lost compensation for time worked more often than they received compensation for time they didn’t work — was enough to establish a viable argument that the employer’s rounding policy didn’t “average out in the long-term,” and potentially amounted to an FLSA violation.
This ruling is a reminder that, even when an employer sets up a seemingly neutral system, that system may still end up violating the FLSA’s requirements. If you have questions about timekeeping, rounding policies, and unpaid hours, it is a good idea to get the right information from an experienced legal pro. The skilled Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert are here to provide you with a detail-oriented review of your circumstances and a thoughtful strategy customized to meet your needs and protect your interests. Contact us through this website or at 404-873-8048 to schedule a consultation today.