Best Ohio Wage And Overtime Lawyer Answer: Can my employer round my time down to avoid paying me overtime? Does the law force employers to pay employees for the exact amount of time worked? How do I sue my job for wage theft if my paycheck is short?
The dedicated wage and hour lawyers at Spitz, The Employee’s Law Firm often blog about employers who fail to pay their employees overtime as required by law (see Can My Boss Avoid Overtime Pay By Calling Me An Executive?; Can I Be Forced To Work Overtime After Hours At Home For No Pay?; and How Do I Find The Right Attorney For My Overtime Claim?); as well as bosses who commit wage theft by paying their employees less than minimum wage (see Does My Job Need To Pay Me Minimum Wage?; Can Amusement Park Workers Be Paid Less Than Minimum Wage?; What Is Minimum Wage In Ohio For 2016? – Call The Right Attorney; and Is Everyone Entitled To Earn Minimum Wage? – Call The Right Attorney)
The Fair Labor Standards Act (“FLSA“) requires most employers to pay its employees overtime after they work 40 hours in a week. The FLSA also requires that employers keep track of employee time so as to make sure its employees are paid for all work performed.
One issue that isn’t as often discussed as often by our wage theft lawyers is whether an employer is allowed to round employee time in order to keep track of employee hours worked. The FLSA does allow certain employers to do just that, even where the employer has its employees use time clocks to punch in and out. This policy is explained in the Code of Federal Regulations at 29 C.F.R. § 785.48(b), which states:
“Rounding” practices. It has been found that in some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees’ starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work. For enforcement purposes this practice of computing working time will be accepted, 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.
Basically, what this means is that an employer can round your time in order to make the payroll process more efficient, but that it must be in a way that evens out over time. So if your employer rounds your time down in one pay period, you will eventually make it up when your employer, at some point, rounds your time up.
The validity of the federal rounding regulations in 29 C.F.R. § 785.48(b) was addressed by a federal court of appeals for the first time recently in a case called Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership. In Corbin, the employee brought suit alleging his employer’s rounding method of calculating his time worked was not legal under the FLSA.
The U.S. Ninth Circuit Court of Appeals reviewed previous challenges to the rounding regulations made in lower courts and wrote:
We are not aware of any published decision by a court of appeals addressing the rounding regulation. District courts, however, have weighed in quite extensively, regularly upholding the validity of employers’ neutral rounding practices. For example, in Alonzo, 832 F. Supp. 2d at 1126, the court found that an employer complies with the federal regulation if it “applies a consistent rounding policy that, on average, favors neither overpayment nor underpayment.” Similarly, in East, 34 F. Supp. 2d at 1184, the court found that because “[d]uring the same time period in which [the plaintiff] was `underpaid,’“ she was “also `overpaid,’“ the employer’s “rounding practices average[d] out sufficiently to comply with § 785.48(b).” The employer’s rounding practice, the court held, “may not credit employees for all the time actually worked, but it also credits employees for time not actually worked.” Id.
The Ninth Circuit also explained the rationale for allowing rounding policies:
Employers use rounding policies to calculate wages efficiently; sometimes, in any given pay period, employees come out ahead and sometimes they come out behind, but the policy is meant to average out in the long-term. If an employer’s rounding practice does not permit both upward and downward rounding, then the system is not neutral and “will. . . result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” Id. Such an arrangement “[p]resumably” does not “average[] out.” Id.; see also Gonzalez, 296 F. Supp. 2d at 932-33 & n.31 (Employees claimed they were systematically harmed by defendant’s rounding system because they could not clock in more than seven minutes prior to a shift and because management manually edited the employees’ time punches; the claim presented a genuine issue of fact for trial).
The employee in Corbin was not successful bringing his FLSA claims. However, as the Ninth Circuit noted, if an employer’s rounding system is not neutral, and favors underpayment over overpayment, then the employer’s rounding scheme could still violate the FLSA. This would occur, for example, when your boss, manager, or supervisor always rounds down or rounds down to the nearest quarter hour but only rounds up to the nearest five minute increment. As wage theft, overtime, and minimum wage issues can be tricky, often the best thing to do is consult with a wage and hour lawyer to find out if your pay rights are being violated.
If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at Spitz, The Employee’s Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.
Disclaimer:
The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of Spitz, The Employee’s Law Firm, Brian Spitz, or any individual attorney.