Rounding an employee’s time clock hours to the next set increment has been a long-standing practice that made bookkeeping and accounting easier on the employer. It was also reflective of the fact that time clocks were once more primitive in nature, so the practice was declared legal in California as long as the rounding was “fair and neutral.”
In other words, the employer had to round up or down to the nearest increment, be that five minutes, 10 minutes or 15 minutes from the employee’s actual work time. They could not always round down, as that would unfairly deprive employees of their wages. The neutral method was deemed to basically “even things out” over time – and the courts upheld employers’ prerogative to do so through numerous rulings.
Now, however, that practice is being called into question.
Camp v. Home Depot U.S.A. could make time clock rounding a thing of the past
In essence, the California Supreme Court has never formally adopted a prior Court of Appeal ruling (See’s Candy Shops v. Superior Court) that defined the “fair and neutral” standard. Now, a new ruling by the Sixth District of the California Court of Appeal in the Camp v. Home Depot U.S.A. case could end the practice entirely.
According to this ruling, rounding should be impermissible when an employer records the actual working times of its employees and has the capacity to pay them by the minute. Given the nature of most companies’ operating systems and the availability of modern technology that can track employee work hours and pay to the exact second, it only stands to reason that the practice should be consigned to the past.
The California Supreme Court has yet to weigh in on the Camp case, but employees should keep watching. If the Supreme Court agrees with the Court of Appeal, there would be numerous class action wage claims coming.