Q: Can employers round work time without infringing on wage and hour laws?

This question has a short answer: Yes. The U.S. Department of Labor released an opinion letter in July 2019 that confirmed that the Fair Labor Standards Act permits employers to round work time. Employers may round time worked to the nearest quarter of an hour, or they can elect to use a smaller increment. 

The letter makes one contingency, as Greensfelder, Hemker & Gale Officer Molly Batsch pointed out in an email interview with HR Dive. The rounding practice must be neutral and average out over time so that employees are compensated for all the time they actually work.

Employers most commonly round work time to the nearest quarter of an hour, Batsch said, as the practice makes processing easier for internal and external payroll administrators. Though this is acceptable under the FLSA, employers must use caution.

"Employers who round must be vigilant to ensure that the rounding policy does not more often lead to rounding in the employer's favor," Batsch said. "Courts tend to rule in favor of employees when this happens."

To avoid that fate, Batsch recommended employers conduct periodic audits to ensure their practices don’t benefit them too much. 

Batsch noted that this puts some extra responsibility on employers: "While rounding may make things easier for the employer on the front end, to avoid a possible lawsuit, employers will have a greater administrative responsibility on the backend."

Employers must also be careful to heed applicable state laws. The majority of states follow federal policy on rounding, Batsch said. But some states prohibit or impose extra restrictions on rounding. Washington, for example, does not allow employers to round when making meal and rest period calculations.