Jul 24 2019 - Compensation - Bianca Saad
The U.S. Department of Labor (DOL) recently issued an opinion letteraddressing permissible rounding practices for calculating an employee’s hours worked. In the letter, a government contractor, who is subject to the Service Contract Act (SCA), uses payroll software to calculate wages based on recorded time entries. The software rounds each employee’s daily hours worked in a neutral manner.
The DOL noted that SCA regulations instructs contractors use Fair Labor Standards Act (FLSA) principles to calculate hours worked. According to the DOL, it’s acceptable to round to the nearest five minutes, one-tenth of an hour, one-quarter of an hour or one-half hour as long as the rounding averages out so employees are compensated for all hours worked.
In the scenario described in the opinion letter, when an employee clocks in and out for each work period using a time clock or computer, the contractor’s payroll software goes through a multi-step rounding process: Read More