Anyone who owns a business in Texas and has employees—particularly employees who are paid by the hour—should be aware of their obligations under the Fair Labor Standards Act (FLSA) and the rights that federal law affords to wage employees. To be sure, the FLSA governs federal laws pertaining to workers’ wages, hours, and overtime pay, among other matters. Generally speaking, the FLSA requires hourly wage employees to be paid for each hour that they work, but there are some exceptions. One such exception is often known as the “7-Minute Rule.” What is the “7-Minute Rule” and how does it affect an employer’s obligations to pay an employee for time worked?
Employers May be Able to “Round” Minutes Worked
The FLSA allows employers to “round” the number of minutes an employee works in certain circumstances. In general, many employers in Texas that schedule shifts for hourly wage workers will base time worked on minutes instead of hours. For example, an employee might work from 3:00pm until 7:45pm, for a total of 4 hours and 45 minutes worked. In some cases, employers might even use other minute increments to track employee work—such as 10-minute increments, for example. What does all of this have to do with the “7-Minute Rule”? It applies in situations in which employers keep track of time worked in minute increments, but first let us clarify how the rounding works.
The FLSA permits employers to round an employee’s time worked regardless of the time of minute increments used to track time worked. To give an example, if an employer tracks time worked in 10-minute increments, the employer can round down if an employee works for 31 minutes (i.e., the employer can round down to 30 minutes for pay purposes). However, the FLSA does not allow employers to always round down. Rather, the employer must round to the nearest increment. Thus, in the example given above, if an employee works for 36 minutes, the law requires the employer to round up to 40 minutes.
The “7-Minute Rule” Applies to 15-Minute Increments
Now that you understand how rounding works in general under federal law, you should know that the “7-Minute Rule” applies to rounding when employers track time worked in increments of 15 minutes. The “7-minute Rule” says that an employer cannot round down if an employee has worked more than 7 minutes. If an employee works between 7 minutes and 8 minutes (such as for 7 minutes and 35 seconds), the employer can round down. Once the employee has worked for 8 minutes, the increment must be rounded up.
Employers should know that this type of rounding, however, is not permitted in crafting an employee’s work schedule to get extra minutes of unpaid work from an employee on a regular basis. Instead, the “7-Minute Rule” applies in “indefinite periods of time” that tend to occur on occasion.
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