Are you Stealing Time? Pitfalls to Avoid When Recording and Rounding

undefinedMichael B. Howard, Esq.

Employee Time Entries

The Fair Labor Standards Act (“FLSA”) requires employers to maintain several types of employee records, including accurate records that reflect the amount of time non-exempt employees (those paid by the hour) spend actually performing work. The FLSA also recognizes that many employers choose to round employees’ time rather than paying them for each minute they are “clocked in.” When choosing how to record employee time and how to round it, employers should keep the following in mind:

Time Clocks Are an Inexpensive Way to Ensure Compliance if Used Correctly

Time clocks are no longer the huge machines that require a physical card to be inserted into the machine to record time. Inexpensive models are within the one- to two-hundred-dollar range and create electronic records of time worked. Timekeeping programs that employers can install on an employee’s desktop are also useful if most of the workforce uses a networked computer every day.

Keep in mind that the individual inputting the time in / time out entries should be the employee—this can be accomplished by having the employee enter a code that only the employee knows, swiping a time card that only the employee has access to, or using a fingerprint reader. This creates a record of the employee’s time as recorded by the employee and avoids problems associated with paper timesheets, such as recording inaccurate start or end times. Time clocks also ensure that a contemporaneous record of clock ins and outs is maintained.

Employers should ensure that employees clock out when they are not working, such as during lunch breaks or if they must leave early; however, an employer should never instruct an employee to clock out but continue working—this violates the FLSA because the employee is not being paid for time spent working and could violate the FLSA’s overtime requirements.

Paper Timesheets Are Adequate Provided Entries Are Accurate and Made by the Employee

An inexpensive but permissible way to keep track of employee time is the use of paper timesheets. These should be maintained by the employee in their handwriting and the employee should record their clock ins and outs down to the minute. Employers should be sure employees are filling out their timesheets as the week progresses and not simply filling one in at the end of the week that adds up to 40 hours. Not only is this not an accurate time record, employers who tolerate this habit may be paying for time not worked. Employers should be suspicious of employees who consistently arrive every day at exactly 8:00, leave at exactly 5:00, and are at lunch from 12:00 to 1:00 week after week. An example of an unacceptable timesheet is one that simply records the total number of hours allegedly worked during the day, rather than specific clock in and out times. Employers also may not have supervisors or lead employees fill out timesheets—this must be done by the employee.

Employers Should Be Cautious When Rounding Time

The FLSA specifically recognizes that employers may round time entries provided that rounding practices do not always benefit the employer. For example, an employee who works 8 to 4 with no lunch may sign in at 8:03 and sign out at 4:02. An employer who rounds these entries to 8:00 and 4:00 is in compliance with the FLSA. It is generally accepted that employers can round to the nearest five- or six-minute increment. Although some older advice states that employers can round to the closest fifteen-minute interval, this practice is now disfavored because of the large amount of time that could potentially be lost by an employee.

How to Deal with Early Clock-Ins, Late Clock-Outs, and Working Remotely

As an initial matter, if an employee clocks in early or clocked out late and was simply socializing and not working, such time is not compensable working time, no matter what the time record reflects. Conversely, if an employee clocks in early or out late and was actually performing work for the employer, even unauthorized work, the employee must be paid for that time. Working outside of approved hours is not a paycheck issue—it is a discipline issue. Employers may implement and enforce rules that state employees may not clock in early and must not clock out late and discipline those who do not follow these policies. Employers may also want to implement “punch windows” of three minutes before and after start times or end times that permit an employee to punch within the window and have that punch rounded to the required punch time.

Employers should also be cautious about hourly employees who can, but are not required to, work from home. Remote access to email and databases often allows a secretary or assistant to communicate with managers over the weekend and answer urgent questions they may have. This time must be recorded as working time either on a timesheet or by creating a timeclock entry reflecting this time.

There are many other issues surrounding how an employee’s pay must be calculated in order to comply with the requirements of the FLSA. Employers or employees with concerns about timekeeping records, time entry rounding, or other pay practices should consult with an experienced employment attorney.

Scaringi Law has experienced employment attorneys who offer free consultations, call 717 657 7770.

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