Summary: Time rounding is a common method of calculating time, but loopholes used by employers can lead to illegal wage theft. California courts have issued decisions that change the way time rounding is used, which also impacts overtime calculations. Contact an attorney if you believe you are a victim of illegal time rounding.
California companies must pay employees for all hours worked as a matter of both state and federal law. While time rounding has remained a widely used practice by employers for years, recent court decisions have impacted how companies should approach these timekeeping procedures.
Employees who are underpaid or deprived of overtime due to unfair time rounding policies have recourse under the law. You should consult with an experienced unpaid overtime attorney if you think you have a wage and hour claim. A qualified lawyer can investigate the situation further to determine whether a violation has occurred.
Understanding Time Rounding Rules in California
California law has historically permitted employers to round time entries as long as the policy was neutral and did not unfairly disadvantage workers over time or lead to consistent underpayment of employee wages. Time rounding often involves adjusting time clock entries to the nearest increment, such as to the nearest quarter hour.
When employers use time rounding incorrectly, this can result in overtime violations along with other illegal payment practices. One of the most notable cases that has changed the way time rounding should be approached by California companies is Camp v. Home Depot USA, Inc. In this case:
- Plaintiffs filed a class action lawsuit against Home Depot for time rounding policies that they alleged deprived them of full wages for the time worked
- Home Depot’s practice was to record employee time to the actual minute that employees punched in and out, but it still used a time clock system that rounded entries to the nearest quarter of an hour
- Home Depot asserted that its employees were not only paid accurately but actually overpaid for the majority of shifts due to its time rounding practices
- However, the lead plaintiff in the case stated that they lost 470 minutes of time from these policies
The case proceeded through multiple phases of litigation. Ultimately, the court asserted that if an employer can capture and has captured the exact amount of time an employee has worked during a shift, it cannot round time.
This means that even if the rounding policy is neutral, an employer in this scenario must pay its workers for all time worked rather than rounding.
The Aftermath of a Major Time Rounding Ruling & What it Means for Overtime Calculations
Time rounding can adversely impact overtime pay. For example, unfairly rounding time down when the employee works less than a full 15-minute increment is a common way that employers deprive workers of overtime pay. A time rounding policy that results in:
- Habitual underpayment of wages
- Always favors the employer, or
- Rounds time for meal periods
may also impact overtime calculations and represent blatant wage theft.
Non-exempt employees must be paid for all of the time they work, and a company should never force its employees to work even a short amount of time off the clock with the intention of rounding down. While California law does not currently prohibit all time rounding policies, the Camp v. Home Depot case is one of many raising serious questions about these practices.
After the Camp v. Home Depot decision by the Court of Appeals, it is clear that employers should not round when they can and do capture the exact time an employee works during a shift. A future opinion by the court could shed more clarity on issues such as whether or not all time rounding practices conflict with state law.
Contact an Attorney About Illegal Time Rounding and Other Overtime Issues
Even though time rounding has previously been a favored way of computing work time, the recent ruling in the Camp v. Home Depot case demonstrates that these calculation methods should only be used in narrow circumstances. Rounding policies can be illegal when used to deprive workers of the rightful wages they have earned.
Time rounding is not explicitly prohibited in California, but if your employer refuses to compensate you for the hours you have worked or is otherwise misusing the time rounding system, they are breaking the law and committing wage theft.
An attorney can help you assert your right to the compensation you are owed. Contact us today by using the online chat or form and request your free, confidential review.
