The Ins and Outs of Time Rounding Policies Under the Massachusetts Wage Act
Are Time Clock Rounding Policies Legal Under Massachusetts Wage and Hour Laws?
Employees in Lowell, Fall River, Worcester, Springfield, Pittsfield, and Barnstable may be entitled to Unpaid Wages and Unpaid Overtime for Unlawful Time Clock Rounding Policies.
Massachusetts law requires employers to pay their hourly employees for all “working time” at their hourly rate (for hours under 40 in a workweek) and at their overtime rate (for hours over 40 in a workweek). M.G.L. ch. 149 § 148; M.G.L. ch. 151 §§ 1A and 1B. “Working time” is a broad concept and includes all time someone is required to be on the premises, time worked before and after shifts to complete work, and rest periods of shorter than 20 minutes. 454 CMR. 27.02.
In most situations, employers calculate “working time” by calculating the amount of time elapsed between an employee’s in punch and the employees out punch. Some employers, however, round employee punches and then calculate the elapsed time for payment purposes.
Can My Massachusetts Employer Round My Time Punches Under Massachusetts Law?
Yes, your Massachusetts employer can round your time entries, so long as “working time averages out over a reasonable period of time so that an employee is fully compensated for all the time he or she actually worked.” 454 CMR 27.07(3). Further, your Massachusetts employer may only round punches to the “nearest five minutes, one-tenth, or quarter of an hour.” 454 CMR 27.07(3).
Rounding policies that do not average out over time violate Massachusetts law. On most occasions, rounding policies will not average out over time when they are not facially neutral. For example, say an employer rounds an employee’s punches to the nearest 5 minutes. Under that policy, an in-punch of 6:56 am gets rounded up to 7:00 am, and an in-punch of 6:54 am gets rounded down to 6:50 am. A 6:56 in-punch favors the employer because the punch gets rounded forward (less working time), whereas a 6:54 in-punch favors the employee because it gets rounded backward (more working time). In that instance, the employer may institute a policy prohibiting employees from punching in prior to 6:56, in order to have the in-punch rounded in its favor.
Can this really make that much of a difference? It’s only 4 minutes, right? Yes, it very much can. For example, take an employee paid $20/hour. And let’s assume that employee follows the rules and punches in for every shift no earlier than 6:56 and that she works 5 shifts a week for a full calendar year and clocks 40 hours of working time per week. That employee loses approximately 20 minutes of working time per week due to her employer’s timekeeping policies. That’s approximately $10.00/week or $520/year. Under Massachusetts law, that employee is entitled to have that amount tripled and to recover attorneys’ fees, interest, and costs due to this violation.
The savings to an employer due to this policy can be staggering. Let’s assume the employer who implemented the above-described policy employees 400 people in a large production facility. The savings to that employer in a given year? $208,000. Two years? $516,000. Three years? $624,000. Ten years? $2,080,000.
Steffans Legal has experience bringing class action wage and hour claims against employers who use rounding policies unfairly to their advantage, including this class action, filed in November 30, 2020. If you are subject to a rounding policy that you think is unfair, contact us today for a free consultation.
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