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LEGAL UPDATE: A Potential End for Time Rounding in WA

by | June 18, 2024

Time rounding is designed to streamline payroll calculations benefitting both employers and employees. The Department of Labor and Industries in Washington has historically permitted this practice, provided it adheres to a strict neutrality policy. The rule is clear: any rounding must not favor the employer. In instances where bias is evident, the scales must tip in favor of the employee.

A recent LNI ruling has raised questions and scrutiny of what a neutral policy requires.  In the case, the employer’s policy, although purportedly neutral, was found to skew to the employer’s advantage. This case opens the door for employees to challenge neutral rounding practices, asserting that they inherently benefit employers when put into action.

Practice Tip:

Employers should review their payroll practices and ensure that any rounding system is neutral. If the system favors one side, it should be adjusted to favor employees during the calculation to avoid wage violation claims. This proactive approach is essential to avoid potential wage violation claims and to uphold the principles of fair compensation.

We will continue to monitor the status of this news and update this post. Contact us to review the implications for your business and make a plan.