Last week, the California Supreme Court declined to review a challenge to an appellate decision on the lawfulness of timekeeping policies that round employee punch in and out times. The case, See’s Candy Shops, Inc. v. Superior Court, provides key guidance to California employers with rounding policies, because no state statutory authority or case law previously authorized the practice. Under federal law, on the other hand, an employer’s practice of rounding a worker’s starting and stopping times to the nearest 5 minutes or to the nearest tenth or quarter of an hour is permissible as long as the practice averages out over a period of time so that the worker is compensated for all time worked.
In See’s Candy Shops, Inc. v. Superior Court, the employer had a timekeeping system that rounded in and out punches up or down to the nearest tenth of an hour. The Court held that a rounding policy is permissible if it is fair and neutral on its face, and does not result in the failure to properly compensate the employee. In reaching its holding, the Court relied on the federal rounding standard (which California’s Department of Labor Standards Enforcement also follows).
Employers with rounding policies should ensure that their policies are in writing and communicated to all employees, and do not operate to deprive employees of wages for all time worked.