Employees in Illinois generally either receive hourly pay or salaries. Those paid on an hourly basis have numerous protections under both federal and state law. The Fair Labor Standards Act (FLSA) is a critical statute extending several different legal protections for hourly workers.
Those protections include the right to receive pay for all time worked with a de minimis exception for minor tasks, like locking up after closing a store. The rules under the FLSA protect worker rights but also extend certain liberties to employers.
Can employers calculate hourly wages by rounding time into increments larger than a minute?
Neutral rounding practices are legal
The legality of time clock rounding depends in no small part on the overall practice by the employer. Under the FLSA, employers can pay their workers in increments of time as large as 15 minutes. Some companies use five- or 10-minute increments instead of 15-minute increments.
They can round the time worked per shift up or down to make it an even increment of time to simplify payroll processes. However, the company must round neutrally. It should round up when necessary and down when appropriate.
If a review indicates that the employer rounds down far more than they round up as a way of reducing wages and limiting payroll expenses, then the practice may not be lawful and appropriate. In scenarios where employers consistently round down to deny their workers pay for time worked, those workers may have grounds for a wage and hour claim.
Those concerned about time clock rounding practices may need to review timekeeping records and payroll records with a skilled legal team to determine if a violation has actually occurred. Learning about what types of employer conduct might technically violate the rights of employees can help hourly workers obtain the unpaid wages that they deserve.
