The Death of Rounding Practices May Be Around the Corner

Seyfarth Synopsis: Neutral rounding policies have long been approved by the California courts. See’s Candy Shops, Inc. v. Superior Court (2012). However, the California Court of Appeal recently held that employers who “can capture and [have] captured the exact amount of time an employee has worked during a shift” must fully compensate employees for all the time worked, rather than rounded time, even if the rounding practice is neutral on its face and as applied. Camp v. Home Depot USA, Inc.

Facts

The employer had a practice of recording employee time to the minute when an employee punched in or out, but then rounded the time to the nearest quarter-hour. Plaintiffs Delmer Camp and Adriana Correa brought a putative class action, alleging unpaid minimum and overtime wages under the California Labor Code. Camp claimed to have lost a total of 470 minutes over the course of four and a half years as a result of the rounding, while Correa was overpaid due to the rounding practice.

The Trial Court Decision

The employer moved for summary judgment, arguing that the rounding policy was neutral on its face and as applied, and therefore in line with See’s. The trial court granted the employer’s motion for summary judgment, finding that its policy met the standards approved in See’s as it was both neutral on its face and as applied.  

The Appellate Court Decision

Both Plaintiffs appealed the trial court’s decision. However, because Correa conceded that she was overpaid, her appeal was dismissed as abandoned. As to Camp’s appeal, the Court of Appeal concluded that the employer had not met its burden to show that there was no triable issue of fact with regard to Camp’s claim for unpaid wages.

The Court of Appeal explained that, pursuant to Labor Code section 510, employees must be compensated for all time worked. In Camp’s case, he was not compensated for over seven hours of work, and this amount of time could not be considered de minimis. The Court of Appeal explained that where employers who “can capture and [have] captured the exact amount of time an employee has worked during a shift, the employer must pay the employee for ‘all the time’ worked ….” According to the Court, there is “no provision in California law that privileges arithmetic simplicity over paying employees for all the time worked.”

Because the See’s decision was issued by a Court of Appeal, and there have been subsequent decisions by the California Supreme Court that call into question the validity of rounding as applied to specific factual circumstances, the Camp Court invited the California Supreme Court to address the propriety of rounding in the face of new technological advances that make it possible for employers to capture the exact time that an employee clocks in and out. The Court of Appeal also invited the California Supreme Court to more generally address policies of neutral time rounding.

What Camp Means for Employers

Given the recent decisions in Troester (holding that the federal de minimis doctrine does not apply to claims for unpaid wages in California) and Donahue (holding that rounding cannot be applied to meal period time punches), and the Court of Appeal’s invitation for the California Supreme Court to weigh in more generally on rounding practices, it is likely that, at best, the circumstances under which rounding is permissible will be further circumscribed or be held not to exist at all.