Rounding off timesheets? No, says state
September 16, 2012
Companies that invested in electronic timesheets tracking the hours worked by their hourly employees soon may wish they’d stuck with old-fashioned paper.
Employers who routinely round a few minutes on time records to reflect a standard eight-hour workday may run afoul of state wage and hour laws.
Rounding is the commonly accepted practice of shaving off a few minutes before or after an employee’s shift to reflect a regular workday. For instance, employers routinely call it 8 o’clock if an employee punched in at 7:57 or 8:01, and 5 o’clock if an employee ended his or her shift within a few minutes of the established quitting time.
Federal law requires that employers keep accurate records of the time worked by hourly employees, but allows for rounding of a couple of minutes here or there, says Jim Nelson, executive director of the Nevada Association of Employers.
Under federal wage and hour laws, employees who routinely clock in prior to their shift don’t have to be paid for that time unless they are engaged in actual work. Early or late clock-punching may be disregarded.
“In most cases the employees don’t begin work during that time,” Nelson says. “They may be walking to their work station, or getting a cup of coffee.”
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The state, however, sees things differently.
State Labor Commissioner Thoran Towler says that though federal law allows for rounding, Nevada has clearly forbidden the practice since adoption of a 1986 law.
“It says employers have to pay for each hour an employee works. We have always read that as they shall be paid for all time worked, every minute,” Towler says. “We believe that legally it means that all time you are actually working you get paid for. In some states you are not going to get paid for that, but here you are.”
The matter is much more of an issue in Southern Nevada, Towler says, primarily because of the significant labor union presence at large Las Vegas hotels.
The issue of rounding has a contentious history in the state. In 2009, for instance, Amazon was the target of a class-action lawsuit filed by a Las Vegas-based employee who says the company routinely rounded off time cards and therefore did not pay for overtime worked. And in 2008 Station Casinos faced a similar suit brought forth by several hourly workers.
The issue of rounding has several implications for Nevada employers. Foremost among them is the possibility that an extra few minutes could trigger paid overtime for employees who work more than eight hours a day or 40 hours a week.
In a given week, employees could rack up 30 to 40 minutes of overtime if they show up early and leave late – traits often considered hallmarks of good employees. Nevada is one of just six states with a daily overtime requirement (though that requirement is wage-dependent) in additional to the more-common requirement for overtime pay to employees who record more than 40 hours in a work week.
Legal hassles also could result for employers who continue to round. Companies that round employees’ timecards could face an investigation and pay for that time worked, Towler says, if a claim is filed with the labor office.
“If a company is rounding down – say you have someone who is leaving at 5:10 and they are only getting paid until 5 p.m – if they file a claim with us we will go after that 10 minutes they weren’t paid,” he says. “We investigate it and see if a law was broken and make a determination. We will issue an award to the employee for the pay they never received.”
Towler says the issue of rounding often fades in and out of the public consciousness. But the law has been perfectly clear on the issue since the mid-1980s, he says. He routinely provides information about the issue of rounding during presentations to the state’s various employer groups since he took the post of labor commission last November.
“This is not a new thing,” Towler says. “The law has been the same for 27 years.”
To avoid any compliance or overtime issues, Nelson says, smaller employers may revert to old-time paper time sheets in which employees simply write in an eight-hour workday and sign off the hours worked at the end of the pay period the actual starting and ending times to reflect hours worked. Other companies may prevent employees from clocking in early.
“We want employers to be aware of this so they have the chance to do what the labor commissioner expects them to do,” Nelson says. “As strange as it might sound, it may be better to go back to the old-fashioned hardcopy way of time keeping.”