Is Rounding Dead in California?

For the past decade, the law has permitted employers to round time entries (e.g., to the nearest five minutes, quarter hour, etc.) so long as the rounding policy is neutral and does not disadvantage employees over time. Last year, however, in Donohue v. AMN Services, LLC, California began chipping away at rounding rules by clarifying that employers are not permitted to round meal periods. And now, in a recent case, the California Court of Appeal has taken a major step towards killing rounding altogether.

 

In the 2022 case, Camp v. Home Depot USA, Inc., the court found that employers are not permitted to round when they can capture and have captured the exact amount of time an employee has worked during a shift. In that case, even if the rounding policy is neutral, the employer must pay the employee for all time worked. This represents a major departure from prior case law, and puts into question whether there are any circumstances when an employer may lawfully round an employee’s time entries.

 

Camp v. Home Depot Background

 

Home Depot had a practice of recording employee time to the minute when employees punched in and out. However, the company relied on a time clock system which rounded entries to the nearest quarter-hour. Home Depot presented evidence to show that employees were paid accurately or overpaid the majority of shifts, and in fact, overpayment occurred in almost half of all pay periods. However, Plaintiff Camp alleged to have personally lost 470 minutes of time due to Home Depot’s rounding policy.

The court ultimately held that Home Depot was not permitted to round Camp’s time entries as it “could and did track the exact time in minutes” and the records showed Camp “was not paid for all the time he worked.” The court also invited the California Supreme Court to provide further guidance on whether rounding is permissible when an employer has the ability to track an employee’s exact time, but hasn’t necessarily done so.

 

Now What?

 

Given this ruling and the court’s invitation to the California Supreme Court, CEA recommends that employers cease rounding practices, particularly if they have timekeeping systems that track exact time. If your organization wants to continue rounding or implement a rounding policy going forward, we recommend that your company seek legal counsel.