Docking pay isn’t legal; rounding time normally is — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Docking pay isn’t legal; rounding time normally is

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Q. Is it permissible to dock pay for someone who clocks in late? We pay the employee for actual hours worked to the nearest quarter hour, but we also dock tardy employees an additional quarter hour. — P.P.

A. You have two questions. First, is it OK to round an employee’s working time to the nearest 15 minutes? The answer to this question is a qualified “yes.”

So long as the rounding practice is neutral, in the sense that it sometimes works to an employee’s advantage and sometimes not, the practice is acceptable. Regulations recognize rounding to the nearest quarter hour, and we have seen a Labor Department Opinion Letter approving a rounding to the nearest one-half hour. (We don’t recommend it; there were special circumstances.) We're assuming that if the employee has a 7:00 start time and arrives at 7:06, you would pay as if he or she arrived at 7:00; and if the employee clocked in at 7:08, you would pay as if he or she arrived at 7:15.

Your second question poses a different issue. You want to dock the employee an additional 15 minutes because he or she was late. This is not a rounding issue, but rather a penalty. This you can't do. Working time must be paid. You should follow your regular disciplinary process for tardiness or early quits. In the above example, you would discipline the employee for being late whether that employee arrived at 7:06 or 7:08, as he or she was tardy in either event.  

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