By: Kara M. Maciel & Lindsay A. Smith
We recently received a question about how to implement a timekeeping policy under the new D.C. Wage Theft Prevention Act (“WPTA”) that allows for rounding by six minutes. As this is an issue that many employers struggle with, both under state and federal wage law, here is our guidance.
Under the WTPA, employers must record the “precise” time worked by its non-exempt employees, among other requirements. D.C. has yet to publish explicit guidance on what it means by “precise” timekeeping, but the Department of Employment Services has stated that complying with rounding regulations of the Fair Labor Standards Act (“FLSA”) would comply with this requirement under the WTPA. Pursuant to 29 C.F.R. §785.48, rounding employee time is permissible as long as it does not result, over a period of time, in failure to compensate the employee properly for all time actually worked. Rounding must work sometimes in favor of the employee and sometimes in favor of the employer, or always in favor of the employee.
To avoid depriving an employee of compensation owed for actual time worked, the U.S. Department of Labor (“DOL”) has stated that always rounding down in determining amount of time worked would likely result in a violation of the FLSA. The DOL has found alternating between rounding back and rounding forward on exact start/end times is permissible because it likely evens out time recorded and compensation owed. For example, if an employer rounds to 15-minute increments, it can round down for 1 to 7 minutes of employee time and up for 8 to 14 minutes of employee time. Thus, if employee start time is 8:00 a.m. and the employee clocks in at 8:05 a.m., his start time would be rounded to 8:00 a.m., but if the employee clocks in at 8:10 a.m. his start time would be rounded to 8:15 a.m.
Employers have several options to address this issue.
- It could program its time clocks to round to the nearest tenth depending on the exact time an employee clocked in similar to the 15-minute intervals shown above. For example, time would be rounded back to the nearest one-tenth of an hour if clock-in/clock-out is only 1-2 minutes past the prior six-minute interval and round forward to the nearest one-tenth of an hour if clock-in/clock-out represents 3-5 minutes past the prior six-minute interval. Thus, if an employee clocks in at 8:03 a.m. the clock-in time would be rounded to 8:06 a.m., but if she clocks in at 8:02 a.m. the clock-in time would be 8:00 a.m. Alternatively, the clock could be programmed to round back at 1-3 minutes and forward at 4-5 minutes. In either event, the rounding system should remain consistent.
- Because of the small increment of time between one-tenth increments, an employer could also choose to consistently round back or round forward to the nearest one-tenth for any amount of time past the prior six-minute interval. For example, if it chooses to round 8:03 a.m. forward to 8:06 a.m., it would also have to round 3:02 p.m. forward to 3:06 p.m. when the employee clocks out. Alternatively, if it chooses to round 8:03 a.m. back to 8:00 a.m., it could also round 3:05 p.m. back to 3:00 p.m.
The most important thing is that the employer does not manipulate the time to clock to its benefit; i.e., if the employee clocks in at 8:03 a.m. and clocks out at 3:03 p.m., time cannot be rounded forward to 8:06 a.m. for clock-in and back to 3:00 p.m. for clock-out to benefit the employer.