Different companies have different practices for tracking the amount of time their employees work and the amount of pay owed to their employees. Many organizations use digital software that helps them pay their workers accurately down to the second.
Other companies may use more streamlined but less accurate systems. Time clock rounding has long been a popular tool for streamlining payroll calculations, especially for smaller businesses. Companies may pay their workers by calculating time worked in larger increments than individual minutes.
Is it lawful for businesses to round the time worked by hourly employees in Illinois?
The law does not prohibit time clock rounding
The Fair Labor Standards Act (FLSA) establishes numerous important payroll rules. Hourly workers generally have a right to pay for all time worked, with de minimis exceptions for a few minutes at the beginning or end of a shift or while off the clock entirely. They also have a right to overtime pay if they put in more than 40 hours.
The FLSA does allow for time clock rounding. Current interpretations of the rule restrict companies to increments of 15 minutes or less. The law also requires neutral rounding practices.
Employers have to honestly evaluate time worked instead of consistently rounding down to reduce what they pay their workers. In scenarios where employers manipulate time clock rounding to deny employees overtime or pay for time worked, that practice could constitute a wage violation.
Reviewing timekeeping and payroll records can help professionals determine if companies may have violated their rights with inappropriate time clock rounding practices. Wage and hour lawsuits can lead to compensation and can also generate consequences for unethical businesses that sought to underpay their workers.