For years, NJ and federal law have differed about when and how and employer can "round" start and stop times. Under the FLSA, employers who use a time clock could round start and stop times to the nearest five minutes, tenth of an hour, or nearest quarter of an hour. This takes into account the practical realization that 100 employees with an 8 a.m. starting time cannot all punch in at once, nor could they all punch out exactly at 5 p.m. The federal regulations say rounding practices can’t always favor the employer. Rounding must be neutral or it must favor the employee. 29 CFR Sec. 785.48(b).
Until December 20, 2010, NJ employers had no option: They had to use exact start and stop times or they had to round in favor of the employee. Effective December 20, 2010, the NJDOL officially adopted as immediately operative N.J.A.C. 12:56-5.8, which mirrors the CFR provision exactly. This adoption is expecially important for multi-state employers, who can now maintain a uniform, nationwide rounding practice and payroll system.
NJ employers who want to use their new right to round down, must also round up. There are several ways to make rounding fair, including:
• Minute-based. For example, say your time clock pays by 15-minute intervals. If an employee punches in at 9:07 a.m., you’d round her start time down to 9:00 a.m. If she punches in at 9:08 a.m., you’d round up the start time to 9:15 a.m. This way, the rounding method will balance out over time.
• Start-stop method. Another option is to round up in the employee’s favor at all starting times. Then, at the end of the shift, round down to the employer’s favor at all quitting times.
Kiernan's Corner: Preventive Law for Employers
