Home Depot will scrap controversial 'timesheet rounding' and pay hourly workers to the nearest minute

• Home Depot currently calculates the number of hours an employee has worked by rounding to the nearest 15 minutes.
• But on January 16, Home Depot will begin paying hourly employees to the nearest minute, the company said.

Home Depot is about to change its pay policy for hourly workers.

Beginning on January 16, Home Depot will pay employees to the nearest minute based off when they clock in and clock out.

Like many retailers, the company has rounded the total time of a shift up or down to the nearest 15 minutes to determine how much to pay employees. But after several employees filed lawsuits in recent years accusing the company of purposefully rounding down their pay, the company is changing course.

"Our policy has been to round total shift time up or down to the nearest 15 minutes, which has been a common industry practice for many years," Home Depot spokeswoman Sara Gorman told Insider. "As laws, technology and workplace practices continue to evolve, we're changing our practice nationwide effective January 16, 2023, to pay hourly associates to the nearest minute based on exact time punches."

Timesheet rounding, or rounding up or down based off time worked, has been used by many restaurants and retailers for years. And it is considered legal under federal laws, so long as it is neutral and favorable to employees and it does not exceed a 15-minute increment.

But the concept has been challenged recently. In the case of Home Depot, California employees have taken to both state and federal courts to accuse the retailer of rounding down their time for its own gain and to seek relief for unpaid work.

And in the case of Camp v. California, the California Court of Appeals ruled against Home Depot, saying in October 2022, that "if an employer, as in this case, can capture and has captured the exact amount of time an employee has worked during a shift, the employer must pay the employee for 'all the time' worked."

Home Depot did not respond to inquiries about employee allegations regarding the policy and if the lawsuits served as an impetus for this change.

Do you work for a retailer or restaurant that rounds up or down your pay? Contact the reporter Ben Tobin on email at btobin@insider.com or on messaging app Signal at +1 703-498-9171.