If an employee clocks in from lunch at 12:25, do you round that time to 12:30? Unlike the beginning and end of a workday, rounding meal breaks is almost never a good idea. Under the FLSA, and in many states that have passed meal and break laws like Illinois and California, meal periods do not have to be paid if they are at least a certain length (usually 20 to 30 minutes) and the employee is relieved of all duties during the entire break.
However, if you round meal breaks to the nearest fractional increment, state and federal enforcement agencies will rightfully question whether your employee actually took the full unpaid break period. For instance, if your practice is to round meal breaks to the nearest quarter hour, can you show that your employee actually took a 30-minute unpaid lunch, as opposed to clocking in after just 24 minutes? In California, where employers must provide employees with a 30-minute meal period no later than the end of the fifth hour of work, rounding meal breaks not only creates wage and hour liability under the FLSA, but also risks incurring the meal period penalty under California law, too. If an employer fails to provide an employee a meal period in accordance with an applicable California Industrial Welfare Commission Order, the employer must pay one additional hour of pay at the employee’s regular rate of pay for each workday that the meal period was not provided pursuant to Labor Code Section 226.7. Shorting meal breaks for 800 employees every day? That could add up to some serious cash. Ask Tesoro Refining, which paid out $11.6 million to settle allegations that it was not providing proper meal breaks to its California refinery employees.
A Few Final Insights on Rounding Practices
The least risky position on rounding? Don’t do it. But, if you must, consider rounding to the shortest increment possible so you can limit your potential liability. If you ever have to litigate your rounding practices, you will generally have less time in dispute if you round to the nearest five minutes than if you round to the nearest 15. Mechanically, how should you round? In the United States, there are three commonly accepted rounding methods:
- Nearest Interval – Simply round up or down to the nearest increment. If you round to the nearest 5 minutes, a punch at 8:01 or 8:02 becomes 8:00, and a punch at 8:03 or 8:04 becomes 8:05.
- One for You, One for Me – Remember learning how to divide a pile of toys, cookies, or anything else with your friends as a child? You can do that with your employees too: one for you, one for me. Under this approach, round to your chosen increment in favor of the employee when they punch in and in your favor when they punch out. Be careful, though! This is an option only if, in practice, it sometimes will benefit both you and the employee.
- Employee’s Favor – You can also always round in your employee’s favor. That’s pretty risk-free, too, but it also results in more time worked for the employee. In the aggregate, this approach could be costly, especially if the rounding results in overtime.
As with most wage and hour issues, these rounding issues are very fact specific and it may not apply precisely to your business.