QUESTION: I read the BOL Gurus article on exempt and nonexempt employees for paying overtime. [See "The Myth of the Salaried Bank Employee: Fiction and Fact".] My question concerns the payment of overtime. Where I work overtime is
paid to the quarter hour; however, I must work 40 hours and 15 minutes before I receive any overtime pay. If I work 40 hours and 14 minutes, I get no overtime. I must work 40 hours and
30 minutes to get 30 minutes of overtime. Otherwise, I get 15 minutes. According to the Federal Wage and Labor Board that I contacted I was told Title 29, Part 785.48(b), "Hours
Worked Under the Fair Labor Standards Act of 1938, As Amended" - rounding practices cannot always be in the favor of the employer and must actually be rounded to the
nearest 15 min. My employer's attorney said that is not true and the employer may round the way he wants. Who is correct?
ANSWER: Section 785.48 of 29 C.F.R. Part 785 provides that an employer must pay an hourly employee for the actual number of hours worked. The Federal Regulations state
that "rounding" of an employee's hours is permissible so long as, in practice, the system of "rounding" used by the employer, in aggregate, does not result in an employee
receiving credit for less than the number of hours the employee actually worked for the employer.
The Federal Regulations, and opinion letters from the Wage and Hour division of the Department of Labor, state that where an employer adopts a practice of "rounding" to
the nearest 15 minute interval, the employer should "round down" any time that is 7 minutes or less from the 15 minute benchmark, and should "round up" any time that is
more than 7 minutes from the 15 minute benchmark.
In practice, this would mean that an employee who works a 40 hour week that ends at 5:00 p.m. would not be entitled to overtime pay if the employee "clocked-out" at
5:07 p.m., but would be entitled to overtime pay if the employee "clocked-out" at 5:08 p.m.
First published on BankersOnline.com 12/18/00 Copyright, 2000, The Compliance Company. All rights reserved.
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