[co-author: Maggie Sheerin*]
Rounding is the practice of capturing time entries on a clock and converting them to the nearest five, ten, or fifteen minute equivalent. For example, the two entries at 8:58 and 9:04 can be converted to 9:00. A recent decision by the California Court of Appeals, Camp vs. Home Depot USA, Inc., calls into question the sustainability of rounding policies over time in California. In 2012, the Court of Appeal ruled in See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012), that an employer’s time rounding policy is legal under California law when the policy is “fair and neutral on its face” and is used in a manner that will not cause , over a period of time, “a failure to properly compensate employees for all the time they have actually worked. As generally applied, the See the sweets test time clock rounding systems allowed as long as rounding was to nearest set increment instead of always rounding based on employee. Several appeal decisions after See the sweets cited him favorably in granting summary judgment to the employer.
However, the California Supreme Court has never formally adopted See the sweets as an accurate statement of California law. Further, in a ruling on a related issue in 2021, the Court expressly noted that it had never adopted the See the sweets standard but that neither party had asked for a review of the conduct of the case. Although this new Camp decision is only an appeal decision, and it does not outright prohibit the rounding of time, it calls into question See Candy broader decision that rounding systems are generally lawful if applied even-handedly.
The Troester and Donohue Undermined cases See Candy Time rounding rule
six years later See the sweetsthe California Supreme Court ruled Troester that the federal de minimis The doctrine does not apply to California wage and hour claims involving nonpayment of employees for small otherwise compensable periods of time, such as closing the store and locking the door after clocking in. Under the federal system de minimis According to the doctrine, “insubstantial or insignificant periods beyond scheduled hours of work, which cannot, in practice, be accurately recorded for payroll purposes, may be disregarded.” But, Troester rejected the federal de minimis doctrine because California wage and hour laws generally provide greater protection than federal law. And, although California has a common law de minimis standard that can be applied in more limited circumstances than the federal standard, it generally does not apply when the activity in question reoccurs on a regular basis (for example, spending a minute each evening activating an alarm after clocking in). In particular, the federal government de minimis doctrine does not derive from the same regulation dealing with the rounding of tally entries, so that the rejection of the de minimis The doctrine does not necessarily address the separate issue of whether an employer can keep time by rounding specific clocking entries to the nearest 5, 10, or 15 minute increment.
In 2021, in Donohue, the California Supreme Court has ruled that employers cannot meet the requirement to provide 30-minute meal periods by rounding time entries such that the rounded entries add up to 30 minutes when the actual break was less than 30 minutes. The Court said that even assuming rounding time is appropriate for calculating hours worked, different policies come into play with respect to the provision of meal periods. The Court explained that “California’s meal break provisions are designed to prevent minor violations of meal period requirements, and rounding is inconsistent with that purpose.” Thus, the opinion rejected the rounding of time for the purposes of meal periods, but avoided addressing the broader issue of whether rounding remained a legal practice for calculating hours worked.
The Camp The employer rounded the time records even though he collected punches at the exact time
Plaintiff Delmer Camp filed a class action lawsuit against his employer, Home Depot. The employer uses an electronic timekeeping system that captures the exact time of punching entries, so that if it was assumed that the employee started work immediately after clocking in and only stopped working when the employee clocked in, the employer knew the exact time the employee was working. Nevertheless, Home Depot has rounded each punch to the nearest quarter hour (as See the sweets indicated was lawful). Over the relevant four-and-a-half years, records showed that the rounding off of Camp’s time resulted in a reduction of his time by a total of 470 minutes, or less than one minute per workday. Based on See the sweets, the trial court granted summary judgment in favor of Home Depot. The employee appealed.
The Court of Appeal reversed the summary judgment decision and appealed See the sweets in question
The Court of Appeal overturned the trial court’s decision and in doing so called into question the continued viability of See the sweets rounding rules. The court held that, based on the general principles mentioned in Troester and Donohue on the need to compensate an employee’s entire working time when it is known that “if an employer, as in this case, can enter and has entered the exact time that an employee worked during a shift, the employer must pay the employee for ‘all the time’ worked.
The court was not persuaded by the employer’s arguments and instead relied on certain general principles to support the view that all captured working time should be remunerated. First, the Court noted that the California Labor Code requires employers to compensate their employees “for all time worked.” Second, the Court noted that the regulatory regime in California is preoccupied with the “little things” and frowns on the de minimis principle, requiring compensation wherever “working time occurs regularly”. Third, the Court noted that California courts have repeatedly deviated from federal standards that offer less protection. Fourth, the Court doubted that rounding provided more efficiency given advances in technology and the immediate ability to capture and calculate wages due to the minute.
The Camp decision, however, limited the extent of its participation. It did not outright prohibit the use of rounding. The decision pointed out that the particular facts of this case – in which the employer used a timekeeping system that could track the exact time worked by the plaintiff – justified concluding that the rounding was inappropriate because in rounding, the employer was depriving Camp of nearly eight hours of work. Pay. Finally, the Camp decision closed by taking the unusual step of inviting the Supreme Court of California to decide the validity of See the sweets where the employer can and has captured all minutes worked by an employee, but still has a rounding policy. It remains to be seen whether the California Supreme Court will accept the invitation.
Key points to remember
Based on Camp decision, employers who continue to round do so at increased risk and employers who round and use an automatic timekeeping system should re-evaluate the use of a rounding policy and pay employees for all time worked and recorded . If an employer wishes to continue rounding hours, they may want to limit the circumstances in which they do so based on the unique facts and circumstances of the situation. Employers with questions about the viability of their current timekeeping systems should consult their legal counsel to ensure compliance going forward.
*Maggie Sheerin is a legal assistant in the firm’s San Francisco office.