Medical Device Manufacturer Pays $250K to Settle 'Time Shaving' Allegations

Spectrum Plastics Group was rounding down time for its employees.

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iStock/Andrii Yalanskyi

Minnesota Attorney General Keith Ellison announced that his office has obtained a settlement with a medical device manufacturing company, Spectrum Plastics Group, Inc., over its time-rounding practices that resulted in more than 500 current and former hourly employees not being paid by Spectrum for all the regular and overtime work they performed.

It is unlawful for an employer to institute a time-rounding policy that consistently results in time being rounded down to the benefit of the employer, and detriment of the employee. The Attorney General alleged that Spectrum Plastics Group instituted such a time-rounding policy that consistently disadvantaged workers by rounding down their time-worked. Spectrum Plastics Group benefitted from this time-rounding practice at the expense of their employees. In total, Spectrum Plastics Group’s time rounding practice resulted in unpaid regular and overtime wages in the total amount of $256,814.14. After the Attorney General initiated its investigation, Spectrum ended its time-rounding policy.

“For Minnesotans to afford their lives, it is crucial for employers to pay their workers all wages they’ve earned,” Attorney General Ellison said.  “When companies enact policies that consistently shave time off employees’ paychecks, employees suffer.  I appreciate Spectrum Plastics Group taking the right step by changing its policies and compensating employees for their lost wages.”

After receiving complaints from workers, the Attorney General’s Office initiated an investigation into Spectrum’s time-rounding practices. Spectrum utilized time-clock software for its hourly employees that rounded time worked to the nearest 15-minute increment. After conducting an audit of two years’ worth of Spectrum’s payroll and time-punch records, the Office discovered that Spectrum inequitably rounded employee hours down (to Spectrum’s benefit) far more often than it rounded their time up (to the employee’s benefit)—resulting, over a period of time, in its employees not being properly compensated for all the time they actually worked. This inequity was due in part to Spectrum requiring employees to obtain its approval before clocking in eight or more minutes early and thereby, benefiting from the time-rounding policy.

Under the terms of the Assurance of Discontinuance filed in Ramsey County, Spectrum Plastics Group agreed to pay unpaid wages to its current and former employees from January 2018 through March 31, 2023, who were harmed by its time-shaving practices. In addition, Spectrum Plastics Group agreed, moving forward, to promptly pay its hourly employees all the wages they are owed and to only use a time-rounding system in the future that is neutral, in that it (on average) rounds time to the benefit of workers and Spectrum equally.

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