California wage and hour laws require employers to pay employees for all hours worked. If you punch a time clock, you need to know the law on rounding work hours in California. California courts have ruled that employers can round work hours, but there are specific rules employers must follow.
If you believe your employer underpaid you because it violated the law on rounding work hours, contact our San Diego wage and hour dispute lawyers for a free consultation. You could be entitled to compensation for your unpaid wages and damages.
What Does it Mean to “Round” Work Hours?
Many employers use time clocks to track the time worked by hourly employees. The employees have a card they time punch when they begin and end their shift. They also clock in and out for unpaid meal periods.
However, employees may clock in before their shift beings. Likewise, they could clock out a few minutes late. Therefore, the employee time does not match perfectly with the employee’s regular shift.
An employer must pay an employee for all hours worked. However, does that include every minute? Calculating hourly pay based on the minute could crease disputes related to how the employer calculates work time.
A common solution many employers use is “rounding” time. Rounding occurs when the employer adjusts the employee’s time up or down to the nearest increment.
For example, an employee clocks in at 6:34 a.m. The employer then rounds the time up to 6:45 a.m. based on their rounding policy of rounding hours up to the nearest quarter of the hour.
Federal law and California law permit employers to round time with specific stipulations.
What Are the Laws for Rounding Work Hours in California?
The California Court of Appeals ruled in AHMC Healthcare, Inc. v. Superior Court that rounding of work hours is allowed. However, the rounding policy used by the employer must:
- Be neutral on its face;
- Be applied neutrally; and,
- Not result in the consistent underpayment of employee wages.
An employer cannot single a group of employees whose time is subject to rounding. The employer cannot create a rounding policy that applies only during specific times when it would benefit the employer to have a rounding policy.
Likewise, the employer cannot develop a rounding plan that always favors the employer to the employee’s disadvantage. The rounding policy must apply even when it results in an overpayment to the employee or overtime pay.
For example, an employer rounds time up before the shift beings. Therefore, the employer should round the time up after the shift ends. It would be unlawful to round the time up to avoid paying an employee who clocks in early but round the time back to avoid paying the employee when they work over.
Can an Employer Round Hours for Meal Breaks in California?
California law requires employers to provide employees with a 30-minute unpaid meal break after the fifth hour of work. After working ten hours, an employee is entitled to a second 30-minute unpaid meal break.
The employer cannot require the employee to work during the meal break. The employee is free to leave the premises during their meal break.
The law for rounding hours does not apply to meal breaks. The California Supreme Court prohibited rounding time punches for meal breaks in Donohue v. AMN Services, LLC. The court held that rounding time punches for meal breaks could hide meal break violations.
In that case, the employer was rounding time to the nearest 10-minute increment. Therefore, the time clock could round up or down depending on when the employee punched the time card.
If an employee punched out for lunch at 12:02, the time clock would round back to noon. If the employee clocked back in at 12:26, the time clock would round up to 12:30. It appeared as if the employee received the complete 30-minute meal break.
However, that was not accurate. In the AMN case, the plaintiff did not dispute that rounding often benefited employees and resulted in an overpayment. Instead, the issue was whether rounding time caused meal period violates to go unnoticed.
The court ruled in favor of the plaintiff, stating that rounding time punches for meal periods was not permitted.
What Are the Rounding Rules for Grace Periods?
An employer may adopt a grace period as part of its rounding policy for work hours. A grace period allows for minor tardiness or clocking in early but not working.
During a grace period, the employee may clock in early but will not be paid until their shift beings. Likewise, the employee may clock out a few minutes late without being paid for that time. Instead, the employee is paid for the number of hours he was assigned to work during that shift.
However, strict rules must be followed for grace periods:
- The employer cannot assign work to the employee during the unpaid grace period;
- The employee cannot perform any work during the grace period; AND,
- The employer cannot exercise any control over the employee’s activities during the grace period.
A grace period allows extra time for employees to get through a line at the time clock. It also allows employees who work until the minute their shift ends time to gather their personal belongings and clock out.
If an employee were to work during the grace period or be assigned any task during the grace period, the employer would be required to pay the employee for the time worked.
What Should Employees Do if an Employer Violates the Law for Rounding Work Hours?
Employees who are underpaid because of rounding policies that violate employment law have several options. They may take steps to resolve the dispute with their employer.
If the employer refuses to compensate the employee for all hours worked, the employee can file a wage and hour claim with the California Department of Industrial Relations. The employee may also choose to file a lawsuit in civil court.
You have the right to consult with an employment attorney about wage and hour disputes. An attorney advises you of your legal rights. For example, it could be better to file an administrative claim than to file a lawsuit in federal or state court and vice versa. A lawyer helps you weigh the options, including the potential benefits, to decide the best way to pursue an unpaid wage claim for rounding violations.
Contact an Attorney for Help
A law firm can handle wage and hour claims and matters related to California employment laws. If you have questions or concerns about your employee rights, contact an employment law attorney for assistance.
