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Comments

  • Good discussion - particularly in light of Opinion Letter FLSA 2019-9 dated 07/01/2019. In this case, the company;s system rounded hours from 6 decimal places to 2 decimal places (nearest hundredth of an hour). WHD said it was OK so long as it was in fact neutral as to the rounding difference. If the employer was favored significantly in the rounding to the nearest hundredth, then it might have been problematic. In this case, it might have been less risky, to round up to the nearest hundredth which potentially could give some undeserving employee more than half a hundredth of an hour round up. Just for perspective, a hundredth of an hour is 6 tenths of a second.

    From my perspective, I'm not sure I understand why they just did not leave the times at six decimal places (millionths of an hour or 6 ten thousandths of a second) and simply minimize the risk of over or under paying someone to almost nothing. I mean, when all is said and done with the time sheet, the wages still have to be rounded to the nearest penny.

  • Oh - the link to the opinion letter https://www.dol.gov/whd/opinion/search/index.htm?FLSA - sorry, I was going to include that - BTW that is the link to the opinion letters index page.

  • What I find interesting is the questioning of assumptions.
    Q. Why do we round?
    A. Because we have always done it or the regulations require it.

    Neither answer is entirely correct. A long time ago some court decisions based on some very specific assumptions occurred and DOL created a regulation to rephrase what the court said. But what if those assumptions change over time? A lot of DOL regulations are based on very old court decisions based on old assumptions. Things change. That does not automatically invalidate the regulations but employers should perhaps be aware of the ground shifting under their feet.

    And DOL never required rounding, they just specified the rules should someone decide to use. The entire rational around rounding was that it was too difficult to get right using 1960s technically. This is however no longer the 1960s and modern technically no longer makes rounding a requirement or even a plus. So the question is not how to round, but why are we containing to do so.

  • I think you are correct - it seems to happen a lot - for example, supplemental pay - the regs say that an employer, under certain circumstances, may elect to withhold 22% of the gross supplemental wage payment. A lot of people seem to think that means that they MUST withhold 22% of the gross for all supplemental wage payments (grin).

  • I do not think that this is a big deal today, but a DOL regulation change eliminating rounding would surprise no one who is paying attention since there actually is no real reason for it. Something not true way back when. Not a big deal but that is not the only really old regulation subject to changing assumptions.

    I keep waiting for some court decision in which an employer is using a smart coffee machine which keeps track of all usage by employees, and which the employer is using to charge employees for excess coffee usage, but for which the employer still wants to claim De Minimus for coffee not charged employees.

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