Dive Brief:
- Home Depot will change its policy for hourly employees to pay to the nearest minute based on time punches, a spokesperson for the company confirmed to HR Dive.
- “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,” Beth Marlowe, a Home Depot spokesperson, told HR Dive via email. “As laws, technology and workplace practices continue to evolve, we’re changing our practice nationwide effective Jan. 16, 2023, to pay hourly associates to the nearest minute based on exact time punches.”
- Home Depot has faced a number of wage and hour lawsuits over the years. Recently, employees in California filed a putative class-action suit alleging they were underpaid due to the company’s quarter-hour rounding system.
Dive Insight:
Home Depot’s shift comes as experts have been urging employers to move away from rounding.
The Fair Labor Standards Act allows employers to use rounding to the nearest 5-, 10- or 15-minute increment in timekeeping. “Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work,” the law states. “For enforcement purposes this practice of computing working time will be accepted, 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.”
Certain state laws may apply a more rigorous lens to timekeeping, however. In California, for example, state law requires that workers be compensated for “all work performed.” In the aforementioned case, Camp et al v. Home Depot U.S.A. Inc., a state appeals court held that at least one member of the class action had been underpaid and “lost nearly a full day’s pay due to rounding.”
The court noted the opinion differed from that in a prior, similar lawsuit and suggested the California Supreme Court review and provide guidance on neutral time rounding, “especially in view of the ‘technological advances’ that now exist which ‘help employers to track time more precisely.’”
The late 2022 decision caused one California law firm to advise employers against rounding in timekeeping altogether unless they can “confirm company policy ensures employees are compensated for all time worked.”
An attorney who spoke to HR Dive about the issue last year also noted this risk and suggested employers that use this method conduct regular audits to ensure the practice isn’t benefiting them too much. She also said state law may be a limiting factor, as the case with California demonstrates.
