Ninth Circuit Rules on Rounding for Time Tracking

For more than 50 years, some employers have used “rounding” (also known as the “Seven Minute Rule”) to ease the administrative headache of tracking time for employees who arrive or depart within a couple of minutes of their scheduled time. Perhaps you do, as well!

What Is Rounding, Anyway?

clockin

In a nutshell, the Fair Labor Standards Act (FLSA) allows employers to round employee arrival and departure times to the nearest quarter-hour, “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.”

For those who are unfamiliar, a few examples might help illustrate how it works:

Example 1: Let’s say Chloe’s shift is scheduled to run from 8:30am to 5:00pm with a half-hour lunch, but she arrives and clocks in at 8:25am, then clocks out at 5:00pm. Since her employer uses rounding, Chloe’s clock-in time is recorded as 8:30am (the nearest quarter hour to 8:25am), her clock out time is recorded as 5:00pm, and she is paid for eight hours, even though she was actually on site for eight hours and five minutes.

Example 2: On another day, Chloe gets stuck in a traffic jam and doesn’t arrive until 8:34am, then clocks out at 5:00pm. Her clock-in time is once again recorded as 8:30am (the nearest quarter hour to 8:34am), her clock-out time as 5:00pm, and she is once again paid for eight hours, even though she was only working for seven hours and 56 minutes.

Example 3: On a third day, Chloe arrives and clocks in at 8:30am. During the day, she learns of a water main break on her usual route home, so she leaves at 4:48pm to try to get ahead of the afternoon rush hour traffic. Her clock-out time is recorded as 4:45pm (the nearest quarter hour to 4:48pm), and she is paid for seven hours and 45 minutes, even though she was at work for seven hours and 48 minutes.

Ninth Circuit Says Rounding Can Be OK

In a recent case (Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership) the plaintiff, Andre Corbin, argued that his employer’s use of rounding should not be allowed, because he was not guaranteed to be paid for every minute he worked in every single pay period.

(In other words, by his rules his employer would have to record his actual arrivals and departures and compare those against the “rounded” times for each individual pay period, and adjust to ensure he either broke even or gained every time. Heads he wins, tails the employer loses?)

Eventually, the case ended up in front of the Ninth Circuit, which has jurisdiction over the western portion of the US, including California, Nevada, Arizona, Oregon, Washington, Idaho, Montana, Alaska, Hawaii (as well as Guam and the Northern Mariana Islands), making it by far the largest of the 13 Courts of Appeals. In an opinion written by Judge Jay S. Bybee, the Ninth Circuit ruled in favor of the employer.

As the court pointed out in its ruling, requiring the employer to record both the actual arrival and departure times to compare against the rounded times each pay period would essentially negate the whole reasoning behind having a rounding option.

As long as the policy is designed to be neutral “both facially and in application,” the court ruled that it is acceptable. The idea is that sometimes a worker will not get paid for a few minutes when they did work, and at other times they will get paid for a few minutes they didn’t work. In the long run, it should all even out. As the court points out, “If an employer’s rounding practice does not permit both upward and downward rounding, then the system is not neutral…”

So, if you want to implement rounding (at least if you’re located in the Ninth Circuit’s jurisdiction) you should be OK as long as your policy is structured to be neutral over time. But you’ll definitely want to check with your labor law attorney to be sure, because some local and state jurisdictions have their own rules.

(And for those who are interested, Acroprint’s software products — timeQplus, Pendulum, and AcroTime — all offer a rounding feature. I’m just saying.)

Resources

The Court Decision — a bit long, but an interesting read, especially for us wage & hour geeks!

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