The Carle Foundation Hospital agreed to settle a class action with a payment of $10.45 million related to alleged violations of federal and state wage laws.
The hospital was accused of having a timekeeping system that unlawfully rounded the clock-in and clock-out times of hourly employees, which allegedly led to underpayment.
Employees who worked hourly for the hospital at any time between May 25, 2013, and January 25, 2025, may qualify to claim a cash payment from this settlement.
Eligibility for the settlement is determined based on the hospital's employment records, specifically the number of workweeks each class member worked during the relevant period. The settlement payment for each eligible employee is calculated by multiplying the number of these eligible workweeks by approximately $1.94, with a guaranteed minimum payment of $30 for those whose calculated amount is less than that.
The total settlement fund of $10.45 million covers attorney fees up to around $5.33 million; attorneys' expenses up to $55,000; a service award of $15,000 to the named plaintiff; and service awards, totaling $21,500, to be distributed among class representatives.
The remaining portion of the fund is allocated for payments to the class members. The deadline to file a claim is August 29, 2025, and a fairness hearing is scheduled for September 19, 2025.
The hospital denies the allegations but opted to settle to avoid the risks and costs of ongoing litigation while ensuring compensation for the affected employees.
Source: https://www.claimdepot.com/settlements/carle-flsa-settlement
Commentary
Accurate time tracking is essential for organizations to ensure proper payroll, legal compliance, and fair treatment of employees.
Rounding - adjusting clock-in and clock-out times to the nearest increment -can lead to underpayment or overpayment, both of which present significant risks.
Underpayment exposes employers to legal actions and fines for violating wage and hour laws, as seen in cases like the Carle Foundation Hospital settlement, where alleged rounding resulted in a multimillion-dollar payout to affected employees.
Overpayment, meanwhile, increases labor costs unnecessarily and can strain budgets.
Organizations must implement precise timekeeping systems that record actual hours worked, down to the minute if possible. This means avoiding automatic rounding in timekeeping software and ensuring that employees are paid for every minute they are on the job. Accurate tracking also supports compliance with federal, state, and local labor laws, which often require employers to maintain exact records of hours worked, overtime, and breaks.
Adopt reliable time-tracking tools - such as digital or biometric systems - that capture real-time data without manual intervention or rounding. Audit the systems regularly and make sure an attorney reviews the system for any privacy risks.
Train managers and employees on the proper use of these tools. Establish clear policies that prohibit practices like "buddy punching" or unauthorized adjustments to timesheets.
Beyond compliance, accurate time tracking allows managers to identify productivity trends, optimize staffing, and address attendance issues proactively. They can help prevent burnout by revealing uneven workloads, and support data-driven decisions about hiring, project planning, and performance reviews.
