The practice of "rounding" time punches—adjusting the hours that an employee has actually worked to the nearest preset time increment—is generally lawful where it does not result in, over time, undercompensating employees for all the time they actually worked. Such rounding practices have survived numerous legal challenges regarding an employer's obligation to maintain accurate time records and compensate employees for total hours worked. But no case had answered the question of whether a rounding practice is lawful in the context of meal periods. On February 25, 2021, the California Supreme Court answered that question in Donohue v. AMN Services, LLC. The Court held that employers cannot engage in the practice of rounding time punches in the meal period context.
California law requires that employers provide employees with an uninterrupted meal period "of not less than 30 minutes" whenever an employee works for more than five hours. (If the employee works less than six hours, the meal period can be waived by mutual consent). If a meal period is required, it must be provided "before the end of the fifth hour worked." If an employer fails to provide a meal period in accordance with these requirements, it must pay the employee one additional hour of pay as a "meal period premium."
In Donohue v. AMN Services, LLC, the employer had a practice of rounding all time clock punches, including for meal periods. Thus, if an employee clocked out a minute after the end of the fifth hour worked, or clocked back in from the meal period after only 29 minutes, the time punches would round in a way that made the meal periods appear compliant on the time records. The court observed that the issue in the case was not whether AMN's rounding policy resulted in the proper compensation of employees, but whether the rounding policy resulted in the proper payment of premium wages for meal period violations. AMN's rounding policy would not result in payment of premium wages for all meal period violations because the practice of rounding punches resulted in short meal periods recording as a full 30 minutes or late meal periods recording as timely.
Unlike rounding in the context of tracking hours worked—which over time is "neutral" because sometimes it benefits the employer by "shaving" time and sometimes benefits the employee by "adding" time—the Court observed that rounding of time punches for meal periods never benefits the employee with respect to the payment of meal period premiums. The timekeeping system that AMN used would never round a time punch to record a compliant meal period as non-compliant; however, it could and did record non-compliant meal periods as compliant. In this sense, the rounding policy was not "neutral" and only operated to deprive employees of meal period premiums to which they were arguably entitled.
This decision reflects the Court's reluctance to permit any intrusions, no matter how minor, in the context of meal and rest periods. The Court spilled a lot of ink discussing the public policy rationale for breaks relating to employees health, safety, and well-being, noting that "[s]hortening or delaying a meal period by even a few minutes may exacerbate risks associated with stress or fatigue, especially for workers who are on their feet most of the day or who perform manual labor or repetitive tasks." The Court's decision embodies its view that "even relatively minor infringements on meal periods can cause substantial burdens to the employee."
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