The Ruling
California Courts of Appeal have historically permitted fair and neutral rounding policies which, over a period of time, result in a net surplus of compensation and benefit to the employees collectively. However, Camp v. Home Depot U.S.A., Inc. calls into question the very viability of rounding policies in California in their entirety. Indeed, on October 24, 2022, the California 6th District Court of Appeal ruled that where an employer could, and did, track the exact time in minutes that an employee worked each shift, a facially neutral rounding policy was not a complete defense to an employee’s unpaid wage claims.
Background
California law requires employers to pay employees for “all work performed” and to maintain accurate records of time worked by nonexempt employees. In recognition of administrative and practical difficulties in recording small amounts of time for payroll purposes, facially neutral rounding policies that do not ultimately benefit the employer have been considered legal under California law.
In Camp, however, Home Depot utilized just such a rounding system, which tracked actual time worked by employees to the minute and then rounded hourly employees’ total daily work time to the nearest quarter hour. Thus, a time increment of seven minutes or less was rounded down to the nearest quarter hour (e.g., six hours and three minutes are rounded down to 6.00 hours), while a time increment of eight minutes or more was rounded up to the next quarter...
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