When tracking time, a neutral rounding policy may not be enough

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Since 2012, California has allowed neutral time rounding policies for employee timekeeping, as long as the policy was facially neutral and did not deprive employees of compensation for time worked, under the Court of Appeal case: See’s Candy Shops, Inc. v. Superior Court. Even rounding to the quarter of an hour had been found to be permissible in the past. However, in the age of precision, California courts have chipped away at this practice – first by holding in Donohue v. AMS Services, LLC that meal periods cannot be rounded, and now rejecting even a neutral rounding policy that resulted in an overpayment 56.6% of the time, in Camp v. Home Depot, and inviting the California Supreme Court to provide further guidance on the appropriateness of time rounding.

In Camp v. Home Depot, Home Depot used “Kronos” an electronic timekeeping system that tracked worktime by the minute, but Home Depot still rounded total daily worktime to the nearest quarter hour. Home Depot won summary judgment at the trial court level, for having a neutral policy. However, the Court of Appeal reversed on October 24, 2022, because the California Supreme Court has never decided the standard set forth under See’s Candy. The Court stopped short of deciding whether an employer who can track time to the minute is required to do so, but given the direction the courts have been going in, it is quite possible that time rounding is on its last legs.

It is likely that the California Supreme Court will provide guidance on this issue now that there is a conflict between See’s Candy and Camp. Further, in such a technologically-advanced age, the courts seem almost annoyed that time rounding is still being applied and employers are cautioned to abandon this practice as the risk (of class action and PAGA cases) is probably not worth finding out if the policy will be considered neutral and fair enough.