California Supreme Court to Address Rounding of Employee Time

As we wrote about previously, the Court of Appeal in Camp departed from a longstanding precedent, See’s Candy Shops, Inc. v. Superior Court, infra, in holding that if an employer’s timekeeping system could determine the exact amount of time that employees have worked, the employer must fully compensate those employees for all time worked, instead of using a neutral rounding policy. The Camp Court also specifically invited the Supreme Court to address this issue.

A Brief Refresher

See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012), had held that an employer could utilize a time rounding policy as long as it was “fair and neutral on its face” and was used in a way that did not result, over a period of time, “in failure to compensate the employees properly for all the time they have actually worked.” Multiple California courts have cited See’s Candy favorably since.

In Camp, the plaintiff alleged that Home Depot’s policy of rounding clock-in and clock-out times to the nearest quarter hour resulted in unpaid minimum and overtime wages. The trial court granted summary judgment to Home Depot on the ground that its rounding policy was neutral on its face, neutral as applied and otherwise lawful under See’s Candy. On appeal, the Court or Appeal disagreed and reversed the trial court’s decision, relying heavily on the California’s Supreme Court decisions in Troester v. Starbucks Corp., 5 Cal. 5th 829 (2018) and Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021). The Camp court held that See’s Candy should be re-examined in circumstances where exact employee clock-in and clock-out times can be determined and the employee is not compensated for all actual worktime. Plaintiff Camp had “lost” more than seven hours of worktime due to Home Depot’s quarter-hour time rounding policy.

As noted earlier, however, the Camp Court specifically invited the California Supreme Court to decide the validity of the rounding standard articulated in See’s Candy where an employer’s timekeeping system has captured all minutes an employee has worked, but the employer nevertheless applies a rounding policy. The California Supreme Court has accepted the invitation.

What Should Employers Do in the Meantime?

In granting the petition to review the Camp decision, the California Supreme Court has specifically directed that, while under review, the Camp decision can only be cited for its persuasive value and for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to choose between sides of any such conflict. During that review period, employers should exercise caution in using a rounding policy, especially if they have a timekeeping system that has the ability to capture the exact times worked by employees.