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Is an employer’s time clock rounding policy actually wage theft?

On Behalf of | Nov 21, 2022 | Employment Law |

Employers have long used increments shorter than individual minutes or seconds to measure how long their workers were on the job. Many companies have historically used five, 10 and even 15-minute increments for the purposes of calculating payroll.

Workers would need to clock in and out, and the company will round the time that they worked to the nearest increment. This does simplify the payroll process a little bit, but it also opens a business up to accusations of unfair payroll practices.

Employees who work for 10 minutes may be upset about the idea of not getting paid because they did not work a full 15-minute increment. The more often it happens, the more it may begin to feel like a way for the company to deny you wages. Is it legal for an employer to round your payroll records?

Time clock rounding is legal when done fairly

Companies have the right to choose the increments in which the increments that they use for calculating pay for their workers, but they may not employ specific payroll policies intended to deprive their staff members of appropriate compensation. You should be aware of their payroll policies including what increments of time they use for the purpose of calculating pay.

If a company has a rule about paying workers in a specific increment of time, it has to be completely neutral when it evaluates clock-in and clock-out times for whether to round up or round down. A worker who has put in 10 minutes out of 15 should get paid for those 15 minutes, while a worker who has only worked three minutes would not.

Provided that the company is fair in its application of the rule, rounding someone’s time clock records is not inherently illegal. However, if you can show that the company manipulated the system to consistently deprive you of pay for the time that you have worked, then you may have grounds for a wage claim. Both manipulating how the payroll department rounds the time or abusing the system by having work a few extra minutes every shift could give rise to wage claims.

Making sense of payroll and wage rules can help those who question whether their employers’ practices are fair or even legal.