WAGE & HOUR


Rounding

Time clock rounding, such as rounding time punches to the nearest quarter hour, can lead to minimum wage and overtime pay violations.  Paying employees using rounded punches can lead to an over- or under-payment for an employee pay period. Comprehensive analysis of matched time and pay data is needed to determine the extent of the alleged violation, including instances where rounding is favorable to employees. Importantly, a defense may exist if rounding of time system-wide can be shown to be “fair.”

THE CLAIM

Employees at a manufacturing plant alleged their employer failed to pay minimum wage, pay all wages, and pay overtime due to illegal rounding. They claimed the rounded punches, over the course of their employment, led to a significant reduction in paid time compared to their actual time worked.

OUR FINDINGS

We analyzed the employee time cards and did confirm that the rounding was, overall, unfavorable to the employees.  However, we identified two trends that were helpful to the defendant. First, we noticed the employer stopped rounding punches on a specific date. Second, we identified different departments where employees were actually paid using unrounded punches, rather than rounded punches. This meant an employee’s potential exposure would significantly differ depending on the time period of their employment and which department they worked for. 

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Welch Consulting Practice Areas

Expert Services in Economics and Statistics.