In 2012, in See’s Candy Shops, Inc. v. Superior Court, the California Court of Appeals held that employers could lawfully round employees’ time punches if the rounding policy was neutral on its face and as applied. The determination relied on regulations under the federal Fair Labor Standards Act (“FLSA”) and the California Division of Labor Standards Enforcement’s (“DLSE”) enforcement position, as no Labor Code provision or Wage Order addressed the issue. Since the See’s Candy Shops, Inc. case, general consensus has been that California permits rounding so long as the policy conformed to the standard set forth in See’s. However, that may no longer be true.
In February 2021, in Donohue v. AMN Services, LLC, the California Supreme Court held that rounding was not permissible with respect to meal periods and questioned, but did not determine, whether the practice could be justified given technological advances in timekeeping and payroll.
Then, in October 2022, the Court of Appeal for the Sixth Appellate District in Camp v. Home Depot U.S.A., Inc. reversed summary judgment for an employer that had a facially neutral quarter hour rounding policy where the employer “could and did track the exact time in minutes that an employee worked each shift and [where] those records showed that [the employee] … was not paid for all the time he worked.”
Based on the Camp decision, employers with timekeeping systems that accurately record time worked should not use any rounding practices that result in potential underpayment of wages.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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