In the California Supreme Court’s recent decision, Donohue v. AMN Services, LLC (2021), the Court held that employers cannot round meal period timekeeping entries. As a result, an employer cannot adjust an employee’s hours worked to the nearest time increment for meal periods. The Court held that California’s meal period provisions are aimed at preventing even minor infringements on meal period requirements. The Court found that a policy that rounded an employee’s time entries was “incompatible” with the objectives of California’s meal period provisions.
The rounding policy in question would round employees’ time entries to the nearest 10 minutes. If an employee clocked out for their lunch at 12:04 and then clocked back in at 12:26, the timekeeping system would round the employees’ entries as 12:00 and 12:30. Although the actual meal period was 22 minutes, the timekeeping system would have recorded the meal period as 30 minutes. AMN relied on the rounded time punches generated by the timekeeping system to determine whether a meal period was short or delayed. As a result, employees who received less than a thirty minute meal period or a late meal period did not receive meal period premium pay. The Court found that even a “minor infringement” on the Wage Order’s requirements for meal periods, such as a meal period of 29 minutes, is a violation, and employees should be paid an hour of meal period premium pay. The Court found that a when the time records show that meal periods were rounded, delayed or missed—a presumption of liability exists. The Court held that the presumption of liability can rebutted by presenting evidence that the employee failed or refused to take a compliant meal period, through the employees’ affirming that they were provided the opportunity to take a meal period through the timekeeping application.
The decision also acknowledges the employers may use electronic applications for employees to record their meal periods. The employer used a drop-down menu, which prompted employees to choose one of three options: (1) “I was provided an opportunity to take a 30 min break before the end of my 5th hour of work but chose not to”; (2) “I was provided an opportunity to take a 30 min break before the end of my 5th hour of work but chose to take a shorter/later break”; (3) “I was not provided an opportunity to take a 30 min break before the end of my 5th hour of work.” If the employee selected the third option, the employee was paid one hour of meal period premium pay. The employee selected an option in conjunction with the employee’s submission of his timesheet. The Court approved the employers’ use of the drop down menu for employees’ to select whether they were provided the opportunity to take a meal period.
The Court held that the rounded time punches failed to track and compensate employees for potentially noncompliant meal periods. Even though some employees were overcompensated where the rounding was in the employee’s favor, the Court held that the Company had not properly accounted for meal periods that were short or late based on the actual time entries.
The Court also reviewed prior decisions addressing the issue of rounding, including the See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889. The Court found that even rounding policies that are considered neutral because they do not favor the employer over the employee are invalid in the context of meal periods—as they do not account for shortened meal periods.
The Court also cautioned employers that the rounding of employees daily start times could result in employees failing to take a meal period prior to the start of the fifth hour of work. Where the timekeeping system uses a rounded start time, the employer should calculate the start of the employees’ meal period based on the actual time the employee clocks in for their work shift to ensure that meal periods commence within the first five hours of work.
The main takeaway from the Court’s decision is that employers are prevented from rounding down employees’ meal period entries by even one minute. Employers should be cognizant of this ruling, and should be prepared to modify their timekeeping practices accordingly to ensure that meal period time entries are not being rounded, and that employees receive their thirty minute meal periods.