Time Clock Rounding Lawsuits for Hourly Employees

Attorneys working with ClassAction.org believe some employers may be violating federal and state labor laws by consistently rounding down employees’ clocked hours, and they’re looking into whether class action lawsuits can be filed.

Under the federal Fair Labor Standards Act (FLSA), it is illegal to round employees’ clock-in and clock-out times in a way that results in workers consistently being underpaid. Time clock rounding—for instance, adjusting workers’ starting and ending times to the nearest five minutes, six minutes or quarter hour—is only permitted if the rounding averages out over time so that employees are compensated for all hours worked.

FLSA Rules for Time Clock Rounding

Time clock rounding up to the nearest quarter hour is legal under the FLSA—but an employer may violate the law’s minimum wage and overtime requirements if they always round to their own benefit.

According to the U.S. Department of Labor (DOL), if an employer tracks workers’ time in 15-minute increments, one to seven minutes of work time may be rounded down to zero, but eight to 14 minutes must be rounded up to 15 minutes of work time. The so-called “7-minute rule” ensures that, over time, the rounding averages out so that employees are paid for all hours worked.

The Department of Labor provides the following example of how an employer can comply with the FLSA rounding rules:

An intermediate care facility docks employees by a full quarter hour (15 minutes) when they start work more than seven minutes after the start of their scheduled shift. Does this practice comply with the FLSA requirements? Yes, as long as the employees’ time is rounded up a full quarter hour when the employee starts working from 8 to 14 minutes before their shift or if the employee works from 8 to 14 minutes beyond the scheduled end of their shift.”

Employee Complaints About Time Clock Rounding

Hourly employees have complained on Reddit about their employers’ time clock rounding practices. In response to one person’s post of a payroll rounding chart, many workers said their employers rounded their hours unfairly, inconsistently, and in the employer’s favor.

Some employees also complained about a lack of transparency, claiming they only discovered the rounding practice after checking clock-in and clock-out times on a timesheet or tracking their hours manually.

Below is a sampling of complaints posted on Reddit [sic throughout]:

Where I work at (in California), our schedule is 7am-4pm. If we clock in early at 6:46am it rounds to 7am, if we clock out at 4:14pm it rounds down to 4pm. It kind of makes sense we would get rounded up if we clock in early (we don’t have the be there so early), but if we’re staying until 4:14pm and only getting paid as if we worked until 4pm, is that compliant? Is this even considered rounding, since we’re only docked pay if we arrive late (7:01am)? If we arrive 1 minute late we lose 15 minutes of pay, but if we stay 14 minutes after we also lose those 14 minutes of pay.”
— ProLandia24, Reddit.com

My company doesnt round like this. Clocking in it rounds up to the next :15. So if I clock in at 6:46, I start getting paid at 7, but if I'm a little late and clock in at 7:01, i start getting paid at 7:15. This policy most certainly does not apply to clocking out though, the second i hit ‘clock out,’ the money stops”
— thecoolvaletguy, Reddit.com

My work has this fun little system that if you clock in 1 minute late you lose 15 minutes of pay but if you clock out 1 minute past time they don’t pay you for it. For example one day I clocked in at 6:01AM and Clocked out at 4:31PM and still was docked 15 minutes.”
— dragonsworn93, Reddit.com

That’s better than where I used to work. The would always round down to the nearest half hour so I would regularly have 15-20 minutes go unpaid. It was just a part-time job I worked senior year hs over like 9 months but I’m confident that I was had like 20-30 hours go unpaid.”
— OragamiPidgeon, Reddit.com

So I work for a company in Tennessee. Theyre technically a small business buts its worth at least a few million dollars. Ive recently started paying really close attention to my hours because things are slow and we are being cut early some days and I noticed the time clock is rounding. It seems to only round at certain intervals and it seems to always be in favor of the company. Ive clocked in around 6:50am almost every day this pay period like 6:53, 6:54 etc. The time clock has rounded me to 7:00am every single time its 6:50am and up. On the day i clocked in at 7:01am i was not rounded back to 7:00am just stuck at 7:01. On the same note when clocking out it seems like its another 10 minute interval but rounding down. If I am clocking out between 3:50pm and 4:00 pm it always seems to round me down to 3:50pm. I clocked out at 3:59pm one day and it rounded me to 3:50 so it seems to always be in favor of the company.”
— andersonaustinw, Reddit.com

Previous Time Clock Rounding Lawsuits

Many proposed class action lawsuits have been filed against employers over their alleged time clock rounding practices, including a case filed in May 2021 that claimed a general contractor consistently rounded hourly employees’ clock-in and clock-out times in its favor.

“For example,” the complaint read, “if an hourly-paid employee clocked out at 5:11 p.m., the payroll system recorded his or her end time as 5:00 p.m. Likewise, if an hourly-paid employee clocked in at 7:51 a.m., Defendant’s payroll system recorded his or her start time as 8:00 a.m.”

Another lawsuit initially filed in October 2020 alleged that an insurance company violated California labor laws by rounding workers’ time records to the nearest half hour in a way that “was neither fair nor neutral.”

A retailer was hit with a lawsuit in January 2019 over its alleged practice of illegally rounding employees’ hours to their scheduled start and end times instead of the times they actually arrived and left work.

Some lawsuits have resulted in settlements, including a $1.2 million deal reached on behalf of Yankee Candle employees. The settlement, which was approved in February 2024, resolved a lawsuit that claimed the company rounded workers’ time entries to 15-minute increments but had policies in place that prohibited them from clocking in late or more than seven minutes early. According to the case, these policies ensured that the time rounding most often benefited Yankee Candle.

How Could a Class Action Lawsuit Help?

A class action lawsuit could help hourly employees get back any unpaid wages they may be owed due to their employers’ time clock rounding practices. It could also force the employers to change their timekeeping and pay practices.

What You Can Do

After you get in touch, an attorney or legal representative may reach out to you directly to ask you some questions and tell you more about how you may be able to help get a class action lawsuit started. It costs nothing to fill out the form or speak with someone, and you’re not obligated to take legal action if you decide you don’t want to.

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