The 8th U.S. Circuit Court of Appeals ruled Aug. 11 that a class suit can proceed against a Kansas City health provider on claims that it underpaid employees by rounding off the amount of time they worked.
The ruling is one of just a few nationally to explore a federal regulation that permits employers to round off time at the beginning and end of shifts so long as it “averages out” to full compensation for time worked.
“We conclude that the employees have raised a genuine dispute that the rounding policy, as applied, did not average out over time,” Judge Raymond W. Gruender wrote for the panel, reversing an earlier summary judgment ruling in favor of the defendant, Saint Luke’s Health System.
According to the opinion, Saint Luke’s uses an automated timekeeping system that rounds off time within six minutes of a shift’s scheduled start or end. For example, an employee who clocked in as early as 8:54 a.m. or as late as 9:06 a.m. would be regarded as having started work at 9 a.m.
The plaintiffs allege that, over the course of several years, employees lost more money from rounded down minutes than were gained from rounding up. One class of employees alleges they were underpaid $140,000 during a two-year period, and another class claims $2.2 million in lost earnings over a six-year period.
U.S. District Judge Brian C. Wimes of the Western District of Missouri granted summary judgment to Saint Luke’s after concluding that the rounding policy was lawful and neutrally applied.
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