The California Supreme Court has recently agreed to hear a class-action case that could have significant implications for how employers in the state use time rounding to calculate employees’ work hours.  Legal experts suggest that the court might lean towards declaring time rounding impermissible if technology allows for accurate recording of actual work time to the minute.

Key Takeaways

• Recent developments in California have challenged the legality of time-rounding practices for employers, raising concerns about potential underpayment of wages.
• The California Supreme Court is reviewing whether neutral time-rounding practices comply with state law.
• Employers in California should review and understand their rounding practices and ensure they understand the implications of the upcoming California Supreme Court decisions.

The California Supreme Court’s 2012 decision in See’s Candy Shops, Inc. v. Super. Ct. established that neutral rounding policies were permissible.  In the 2021 case of Donohue v. AMN Services, the Supreme Court questioned the justification for rounding given advancements in timekeeping technology that allows punches to be tracked to the minute.

In October 2022, the Court of Appeal further questioned the validity of rounding in Camp v. Home Depot U.S.A., Inc.  The case involved employees who alleged unpaid wages due to Home Depot’s rounding policy, despite the company’s ability to track precise work times. The case was sent to the California Supreme Court emphasizing the need to reconsider the application of See’s Candy when employees’ work can be captured accurately.  In light of these developments, employers in California need to understand how their timekeeping systems are rounding and consult legal counsel for review of those practices.