California: Another Nail in the Coffin for Rounding Practices

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All Employers with Employees in CA

EFFECTIVE

July 24, 2023

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Quick Look

  • Where employers can and do track employees’ exact time worked, employers cannot use rounding policies, even if neutral, to determine employee pay.

Discussion

In Woodworth v. Loma Linda Univ. Med. Ctr., the California Court of Appeal stated that where an employer can and does track an employee’s exact time, the employee must be paid for their actual time and not based on a rounding policy. Notably, California requires employees to be paid for all actual time worked. Here, an employee claimed she was not properly paid for time worked because the employer rounded employees’ time to the nearest tenth of an hour. The employer claimed that the policy was neutral and there was no systemic advantage to the practice.

This case comes on the heels of the 2022 ruling in Camp v. Home Depot U.S.A. Inc. where the California Court of Appeal stated that if an employer can and does track employees’ time worked in minutes, neutral time rounding is not a defense for failing to pay employees for all time worked. In fact, the Woodworth employer’s computer-based timekeeping system captured the employees’ time to the minute and took the extra step of rounding the time punches. The employee’s evidence showed that she was not paid for 6.3 weighted hours under the rounding policy. Under the circumstances, the court said the employee had to be paid for all time worked.

With the ongoing list of cases disfavoring rounding time, employers must take great care to review their timekeeping practices and rounding policies. A stated consideration in favor of rounding from recent rulings is when employers are unable to track employees’ exact time worked. With today’s technology, that argument seems to be less likely it will be accepted as time goes on. In fact, the issue of rounding time is currently awaiting review by the California Supreme Court. It remains to be seen if rounding will survive at all.

Action Items

  1. Have timekeeping practices and rounding policies reviewed for compliance.
  2. Consult with legal counsel for historical wage and hour corrections.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase