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Rounding Rule May Determine Calculation of Overtime Pay

May 27, 2002

Question: Hourly employees at my company are marked late after clocking in one minute past their scheduled start time. However, we are not paid for working past our scheduled stop time, unless we have worked at least 15 minutes of overtime.

We think this is illegal.

--S.K., Lomita

Answer: It is perfectly legal to discipline employees if they clock in after the start of a scheduled shift. Similarly, if you are unrepresented or if your union contract permits, an employer can round an employee's starting and stopping times to the nearest quarter-hour.

But this practice is unlawful if the employer rounds beyond the nearest quarter-hour or if the rounding results, on average and over a period of time, in a failure to compensate employees properly for all time they have worked.

For example, an employer is allowed to dock employees 15 minutes' pay if they arrive for work eight minutes after the start of their shifts.

By the same token, an employee working eight minutes overtime would be entitled to a full 15 minutes of overtime pay.

Under this rounding practice, an employer would not be allowed to dock employees who arrive seven minutes late and could lawfully refuse to pay overtime when an employee works seven minutes beyond the end of a shift.

It does not appear that your employer is following legal rounding practices, however, since it fails to pay wages to employees who work eight to 15 minutes past their scheduled shifts.

If you are represented, you should notify your union. If you are unrepresented and your employer will not change its practice, you may wish to consult an employment attorney or file a complaint with the nearest office of the state labor commissioner.

If you are successful, you may be entitled to recover back pay, including retroactive overtime premiums at time and a half, as well as interest, attorneys fees and statutory penalties.

--Joseph L. Paller Jr.

Union, employee attorney

Gilbert & Sackman

Fingerprinting of Employees Is Legal

Q: I work for a small wholesale company in Southern California. Recently all the employees were required to give their fingerprints and have photos taken. The company said it was just updating its personnel files.

I'd like to know if an employer in California can legally do this. It seemed to be an invasion of privacy.

--D.A., Anaheim

A: Under California law, an employer may require employees to furnish fingerprints and photographs for its own use.

--Deborah C. Saxe

Management attorney

Heller Ehrman White

& McAuliffe

Temp Worker's Recourse on Unemployment Claim

Q: I worked as a temporary municipal employee for seven years. One day, I was called in and told that my position had been eliminated and that my services were no longer needed.

When I applied for unemployment benefits, my request was denied because my employer stated I was terminated for criminal activity. I know nothing of this activity.

What is my recourse? Attorneys have told me that I cannot do anything because I was a temporary employee.

--D.C., Alhambra

A: You are certainly entitled to examine your personnel file to see if it includes any reasons for your termination.

In addition, you can appeal the decision of the Employment Development Department to the California Unemployment Insurance Appeals Board, which would hold a hearing to decide whether the reasons for denying your benefits are legitimate.

In determining eligibility for unemployment benefits, the EDD and the appeals board apply the same standards to temporary and permanent employees.

The basic rule is that if you are terminated for reasons other than misconduct in connection with your work, you are entitled to benefits.

--Michael A. Hood

Employment law attorney

Paul, Hastings, Janofsky

& Walker

Effect of Change in Pension Vesting Rules

Q: From September 1979 to March 1986, I worked as a nonunion employee for a large national company. At the time I joined the company, all nonunion employees were eligible for a company-paid pension upon retirement at age 65. Employees became vested after 10 years of service.

Since the pension reform act in 1986 reduced the vesting period to five years from 10 years, would I be considered vested since I did not quit until after the law changed?

--K.R., Los Angeles

A: Although the Tax Reform Act of 1986 did change the vesting standards for tax-qualified pension plans, the law did not take effect until Jan. 1, 1988, and applied only to individuals employed on that date. Thus the new vesting rules do not apply to you.

--Kirk F. Maldonado

Employee benefits attorney

Brobeck, Phleger & Harrison

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