Takeaway: A time-keeping policy using neutral rounding will not shield an employer from liability for failing to pay employees for all time worked.
When an employer tracked the exact time in minutes that employees worked, and those time-keeping records showed that an employee was not paid for all the time he worked, the employer could not simply rely on its neutral rounding policy as a defense to the employee's wage and hour claim, a California court of appeals recently ruled. The employee was entitled to a trial to determine whether he was paid for "all hours worked," as required by California law.
Although the employer acknowledged that the employee had lost a total of 470 minutes over approximately 4 years due to the rounding policy, it contended it was still entitled to dismissal of the employee's claim for unpaid wages because its rounding policy was neutral on its face and neutral as applied. Therefore, the employer argued, its rounding policy should serve as a defense to the wage and hour claim, based on the standards established in a previous California court of appeals case (See's Candy Shops Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012)). The trial court agreed and dismissed the lawsuit. The employee appealed.
On appeal, the employee claimed that neither the state Labor Code nor the relevant wage order authorizes time rounding that results in an individual employee failing to receive compensation for all time worked. The appeals court agreed and ruled...
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