Jonathan Crotty was quoted in Human Resources Director about the implications for employers regarding a recent court ruling on unpaid working time.

The Department of Labor adopted regulations that allow employers to "round off" the extra few minutes before or after workers begin or end their work. If the employer does not dock employees’ wages for clocking in up to five minutes late, it does not have to pay employees who clock in up to five minutes early. The rule presumes that over time the early and late time will balance out.

A new decision from the Eighth Circuit Court of Appeals reminds employers that this rounding rule does not provide absolute immunity from lawsuits claiming shorted wages.

"That's the takeaway we saw from this case," Jonathan told the publication. "Employers may think, ‘If I use the rounding rule, it's kind of a safe harbor, and I can't be sued.’ And I think this case points out that that's not the case."

In Houston v. St. Luke’s Health System Inc., the plaintiffs filed a collective action Fair Labor Standards Act (FLSA) and state wage lawsuit alleging that despite compliance with the rounding rule, employees were systematically underpaid over time. They obtained data from the employer’s automated timekeeping system showing that two-thirds of the time, the rounding policy was applied to workers who clocked in a few minutes early. The amount of unpaid time for each affected employee was small. But when it’s multiplied over a large workforce subject to this system for a number of years, the cumulative claimed underpayments reached several million dollars.

Advanced technology around digital timeclocks and other methods of timekeeping can now make companies more vulnerable to class action suits, Jonathan pointed out.

"Now plaintiff’s attorneys have access to software, that if they can get the payroll information in, they can fairly efficiently crunch those numbers and come up with a determination as to whether or not the employees were being fairly paid," Jonathan said. "There are plaintiffs’ law firms who specialize in collective action and FLSA work. They're smart people, and they're always looking for new theories on which to base these claims, and I think this may be one that's going to get some interest from them."

Jonathan said there are several ways employers and human resources can work together to reduce the risk of timecard litigation. That includes companies conducting their own reviews of timekeeping to see how the round off rule is affecting employees in the workplace. 

You can read the full article here: Should staff be paid for clocking in early? Judge says 'yes'

Human Resources Director offers the latest news on the human resources profession.