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Rounding down (Or up) when docking pay

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in HR Management,Human Resources

Q. Is there a rule for docking someone’s pay if he punches in late, and if so, how many minutes of grace time does he get before you dock him 15 minutes?

A. First, you may not dock exempt employees’ pay in the way you describe. If exempt employees clock in late, you may discipline them under your company policies, but you may not dock their pay. 

Assuming the question pertains only to nonexempt employees, you need to pay the employees only for their actual hours worked. For example, if nonexempt employees clock in 15 minutes late, you do not need to pay them for those 15 minutes.

It sounds as if your question is also about “rounding” practices. In some industries, employers track employee hours in 15-minute increments (or five minutes or one-tenth of an hour). The Fair Labor Standards Act (FLSA) allows an employer to round employee hours in this way. However, an employer will violate the FLSA if it always rounds down.

For example, an employer can dock employees by a full quarter hour if they start work more than seven minutes after the start of their scheduled shifts, as long as the employees’ time is rounded up a full quarter hour when they start working from eight to 14 minutes before their shifts, or if the employees work from eight to 14 minutes beyond the scheduled end of their shifts. 

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