The Home Depot will change its pay policy for its hourly workers and pay to the nearest minute on the clock.
“Our policy has been to round total shift time up or down to the nearest 15 minutes, which has been a common industry practice for many years,” said Sara Gorman, spokesperson for The Home Depot.
Many businesses often round total time of an hourly employee’s shift, sometimes called “time clock rounding,” to the nearest quarter hour, but that is changing at the retail giant.
“As laws, technology and workplace practices continue to evolve, we’re changing our practice nationwide effective January 16, 2023, to pay hourly associates to the nearest minute based on exact time punches,” said Gorman.
More about time clock rounding:
The Department of Labor (DOL) said it allows employers to round time up or down within 15-minute increments.
But there’s a catch: This method can’t be used as a means of cutting labor costs or to favor the employer in any way.
In a legal challenge this past fall, Camp v. Home Depot U.S.A., Inc., the viability of these time clock rounding policies in California in their entirety was questioned.
The California 6th District Court of Appeal ruled that where an employer could, and did, track the exact time in minutes that an employee worked each shift, a facially neutral rounding policy was not a complete defense to an employee’s unpaid wage claims, reported the website cases.justia.com.
At the website hourly.io – a startup that offers workers’ comp and payroll to small and medium businesses with hourly workers – a couple of tips about time clock rounding were provided.
“If you chose to round to 15-minute increments, you need to observe the 7-minute rule; for every 1 to 7 minutes that are rounded down, there is a corresponding timeframe of 8 to 14 minutes that are rounded up to the nearest quarter-hour and counted towards total work time,” said the hourly.io website.
Time clock rounding should be performed in a way that doesn’t favor the employer, it said, but rather “averages out so that the employees are fully compensated for all the time they actually work.” If it’s impossible to ensure a “neutral” outcome, rounding should favor the employee.
Also noted from website: “Under the Fair Labor Standards Act (FLSA), all employers are required to track and store employee time records completely and accurately. This can be done either by asking employees to write their hours down, using regular time clocks or through time-tracking software.