Can Your Employer Round Your Time?

The short answer is probably.  Typically, these policies state that times will be rounded up or down to the nearest tenth of an hour or other similar increment.  As long as it balances out over time such that the employee is not paid for all of the time they have actually worked.

So, yes, an employer can round time up or down, but it must balance out over a period of time.  Determining legality still depends on the totality of the circumstances, and whether or not the policy or actual practices of the employer operate to short change employees.

These policies have been permitted under federal law, and the California Department of Labor Standards Enforcement has expressed that rounding policies are legal under California law.  These positions were supported in a recent case against See’s Candy–the first published California decision finding that rounding policies are acceptable under certain conditions.

The See’s Candy case was filed by employees that claimed the timekeeping system resulted in underpayment of wages to employees.  The employees argued that a rounding system is unlawful as a matter of law.  Although the trial court agreed with the employees, the California Court of Appeal overruled the trial court and held that,

“the rule in California is that an employer is entitled to use the nearest-tenth rounding policy if the rounding policy is fair and neutral on its face and 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.”

This ruling doesn’t mean that See’s Candy has prevailed.  It just means that rounding policies aren’t unlawful as a matter of law.  There is still an issue of fact as to whether or not the policy resulted in the underpayment of employees’ wages over time.

Here is a link to the actual opinion: