Keeping Time and Time Rounding Policies – What all CA Business Owners Need to Know
- Posted on: Jul 20 2023
California business owners have a lot to think about, including what they must do to comply with labor laws while running an equitable and fair work environment. One labor law concern is that they must maintain accurate records of the hours each employee works and must implement what are known as time rounding policies. Here’s what businesses operating in California should know about keeping time.
Reasons for Accurate Records
In addition to California labor laws, which require businesses in California to maintain detailed records in compliance with state employment regulations, there are a few reasons for employers to maintain correct records of all employee work hours. These reasons include:
- Fair Compensation – Everyone wants to be paid fairly. By maintaining accurate records of hours each employee works, it can help reduce the possibility of wage (hour) disputes.
- Accurate Calculation for Overtime – When a business fails to correctly calculate overtime wages, they may face legal issues for incorrect overtime pay.
- Improved Employee Relations – Accurate timekeeping helps to increase employee relations by building trust between employers and their employees and reducing the risk of conflict.
Understanding Time Rounding Policies
Employers often implement time rounding policies in order to make payroll calculations easier. Time rounding is the practice of adjusting the clock-in and clock-out time for employees to the nearest predetermined interval of time. These are often 5-, 10-, or 15-minute intervals. For instance, if a business has a time rounding policy with 15-minute intervals and they clock out at 5:13pm they would round it to 5:15pm (the nearest 15-minute interval).
Although time rounding policies can help to simplify administrative tasks, there are still legal aspects of it to consider:
- CA Labor Code
California’s Labor Code doesn’t expressly prohibit time rounding policies. However, it’s still essential that employers’ policies don’t result in the systematic under-compensation of employees over time.
- De Minimis Time
California adheres to the “de minimis” doctrine, which permits employers to disregard minimal amounts of off-the-clock work that are difficult to track as a practical matter. Still, employers are not to abuse this.
- Equal Treatment
Any time rounding policies that a business adheres to must treat all employees equally and not cause the employer to systematically benefit over them.
- Accurate Rounding
As with equal treatment, it’s imperative that time rounding is fair and unbiased. Therefore, the time rounding in question should round up and down in a manner that provides for balance over time. For instance, if a business works in 15-minute intervals and an employee clocks in at 9:02am and clocks out at 4:59pm, the business would round 9:02am to 9:00am and 4:59pm to 5pm.
- Clear Communication
It’s also important that employers maintain open communication with employees surrounding their time rounding policies. They should share the specific intervals that are used and why they have been implemented.
Employees are extremely valuable to businesses and ensuring their fair compensation is of great importance. Accurate timekeeping is a cornerstone of California labor laws and helps to ensure compliance with state regulations and minimizes the risk of legal challenges.
The Law Offices of Brian L. Fox, APLC Help California Business Owners and Employers
If you are a business owner and employee people, it’s important that you comply with all state regulations. The last thing you want to do is to violate the law – whether or not you were aware of it.
At the Law Offices of Brian L. Fox, APLC we know how important it is to protect your business, your employees, and your interests. We will help you to establish a comprehensive business plan that includes time rounding policies, and meets your needs to set you up for success. To learn more or to schedule a free consultation, contact us today!
Posted in: Business Law