Home Depot will abandon contentious 'timesheet rounding' and pay hourly employees to the nearest minute.

The decision comes after employees filed lawsuits accusing Home Depot of failing to pay them. Home Depot is about to change its hourly pay policy.

Beginning January 16, Home Depot will pay employees to the minute, regardless of when they clock in and out.

To determine how much to pay employees, the company, like many others, has rounded the total time of a shift up or down to the nearest 15 minutes. However, after several employees filed lawsuits against the company in recent years,

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

Many restaurants and retailers have used timesheet rounding, or rounding up or down based on time worked, for many years. It is also legal under federal law, as long as it is neutral and beneficial to employees and does not exceed a 15-minute increment.

However, the concept has recently been called into question. In the case of Home Depot, California employees have filed lawsuits in both state and federal courts, accusing the retailer of rounding down their time for profit and seeking compensation for unpaid work.

In Camp v. California, the California Court of Appeals ruled against Home Depot, declaring 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.”

However, Home Depot did not respond to inquiries about employee allegations about the policy or whether the lawsuits prompted the change.