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Department of Labor: Employer's Rounding Policy Was Permissible Under the Service Contract Act


On Monday, the Department of Labor issued an opinion letter following a request from an employer that sought guidance on whether its policy of rounding hours worked by its employees under government contracts that were subject to the Service Contract Act ("SCA") was permissible.

In its two page opinion letter, the Department of Labor noted that the SCA generally requires government contractors to satisfy certain minimum compensation standards for employees under covered government contracts.  SCA regulations stipulate that contractors should calculate hours worked by using Fair Labor Standards Act ("FLSA") principles set forth in the regulations.  In relevant part, the regulations clarify that its is acceptable for employers to round time in determining an employee's hours worked provided that the rounding "will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked."

In this instance, the employer had a policy of rounding hours worked to the third decimal point.  For instance, if an employee worked 6.784999 hours, the work was rounded down to 6.78 hours.  However, if an employee worked 6.856000 hours, the work was rounded up to 6.87 hours.  Based upon this employer's rounding policy, the Department of Labor found it was neutral on its face and therefore complied with FLSA regulations.  Consequently, the employer's rounding policy was found to be compliant with the SCA and therefore lawful.


For a copy of the opinion letter:  https://www.dol.gov/whd/opinion/FLSA/2019/2019_07_01_09_FLSA.pdf

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