If your facility requires employees to clock in, you’ll probably want to pay attention to a recent ruling with the potential to cost you plenty.
A federal appeals court just breathed new life into a lawsuit that challenges employer timekeeping practices. The latest ruling sheds light on the potential pitfalls of rounding methods — and the potential risk of accumulating underpayments.
Torri Houston, formerly employed as a surgical technologist at St. Luke’s Health System, sued the provider in 2017. Her lawsuit alleged that its timekeeping system did not comply with the Fair Labor Standards Act.
At the core of her complaint was the provider’s practice of rounding clocked times within a six-minute window of a scheduled shift’s start or conclusion. So, if a person clocked in at 2:54 p.m. for a 3:00 p.m. start, that employee would not be paid for the six minutes worked. Similarly, a worker who clocked out early at 2:54 p.m. for a shift ending at 3:00 p.m. would still be paid for those unworked six minutes.
St. Luke’s legal representatives argued that their rounding policy was neutral and lawful.
However, Houston alleged that upward rounding systematically deprived her of nearly seven hours of rightful compensation.
“Their policies, practices, and/or procedures are designed to intentionally avoid paying their employees for all such hours worked,” the lawsuit alleged.
A lower court initially sided with the employer. But on appeal, the ruling was vacated and sent back to district court for further examination.
“[Houston] maintains that she has presented sufficient evidence to raise a genuine dispute that the policy results in systematic undercompensation over time,” the appellate court noted. “We agree.”
While the Fair Labor Standards Act regulations does allow rounding, it also requires that employees must be compensated for all time worked.
Given the similarities in this case and the rounding seen at many long-term care facilities, this might be a good time to audit your facility’s timekeeping and cost practices.
Operators who engage in rounding that results in unpaid labor cost could find themselves entangled in messy legal proceedings.
Even if the result is unintentional.
John O’Connor is editorial director for McKnight’s.
Opinions expressed in McKnight’s Long-Term Care News columns are not necessarily those of McKnight’s.
