Rounding Hours Worked and Keeping Time Under California Law

• Jan.30.2020
• Wage & Hour

Hourly employees — those who are paid an hourly wage for their services — are an important part of the American economy.

According to data provided by the Bureau of Labor Statistics (BLS), approximately 58 percent of our country’s workforce is paid on an hourly basis.

There are very are important regulations, including the Fair Labor Standards Act (FLSA), that protect an employee’s right to receive wages for the full hours that they worked.

Simply put, an hourly employee’s workplace contribution must be recorded accurately —  they deserve to be paid for every hour that they work.

In theory, these rules are relatively straightforward.

However, in practice, time clock rules for hourly employees are more complicated.

Do companies have to track every minute that workers are on the job? Can employers round to the nearest hour or half-hour? Here, our Los Angeles wage and hour attorneys will answer these questions and more.

We explain the most important things that you need to know about California time clock laws. If you have any specific questions or concerns about your situation, please call our Los Angeles law office at (818) 844-5200 or send us an online message for free legal guidance.

Rounding Policies are Allowed — But They Must Be Consistent and Fair

As a general rule, California follows federal wage and hour regulations (California Labor Code § 204). Under these rules, rounding hours worked is permitted as long as the employer uses consistent, fair, and neutrally applied policies.

If a rounding policy results in the systematic underpayment of workers, then it is unlawful.

For an employer rounding policy to be valid in California, it must:

• Be fair and neutral on its face; and
• On average, not favor the employer.

This means that a rounding policy, by definition, must result in hours being rounded up (overpayment) as frequently as it results in hours being rounded down.

Any California clock rounding policy that fundamentally favors the company — whether it is because it violates the law by only rounding hours down or because it otherwise systematically results in underpayment of workers — can and should be challenged through a wage and hour claim.

One of the best examples of how California courts treat rounding disputes comes from the 2012 California appeals court decision in Candy Shops, Inc. v. Superior Court of San Diego County.

In this case, the court relied on the rounding standard set by the U.S. Department of Labor (DOL), ruling that an employer could round to the nearest tenth of an hour as long as it was done in a manner that would, over time, result in employees receiving proper compensation for time worked. 

Negligible (De Minimis) Time Does Not Always Need to Be Tracked

Somewhat related to rounding of hours, federal courts have determined that employers may not be required to track so-called negligible or de minimis time.

Time that is considered to be unsubstantial or insignificant may be disregarded by an employer — as long as the employer is not doing so in a way that results in the systematic underpayment of workers.

As an example, a federal court once held that seven minutes of unrecorded time was “negligible”. 

On the other end of the spectrum, a court held unrecord time that resulted in approximately $9.00 (inflation-adjusted) in unpaid wages was not de minimis.

However, the California Supreme Court recently ruled, in Troester v. Starbucks, that the de minimis rule is inapplicable to California’s labor law. 

In other words, if any amount of wages is unpaid, the employer is liable for a violation of the law.

This is a complicated issue that should always be viewed on a case-by-case basis.

If you believe that your employer is systematically or consistently not recording the full hours that you worked, you should speak to an experienced Los Angeles wage and hour lawyer right away.

California Employers Can Adopt ‘Grace Period’ Policies

Another important thing that employees should know about the California timekeeping requirements is that ‘grace period’ policies are permitted — so long as the employer does not force the employee to put in ‘off-the-clock’ work.

Some companies in Southern California use time clock grace period policies to increase their efficiency.

With a grace period policy in place, California employees can ‘clock in’ a little early or ‘clock-out’ a little late and still be paid for the hours that they actually were assigned work.

As an example, imagine that an employee was assigned an eight-hour shift beginning at 9:00 AM. Her company has a grace period policy, and she ‘clocks in’ at 8:50 AM. 

With the California grace period policy, the employee can clock in early and not be paid for the first ten minutes. However, she also cannot be assigned or expected to complete work within that ten minute period. 

Though she has physically clocked in, she is not yet being paid and, therefore, cannot be required, asked, or allowed to do any work. This is a very strict rule.

In California, employers are only permitted to use grace periods if:

• The employee performs no work during the unpaid period;
• The employee is not permitted to work during the unpaid period; and
• The employer does not exercise control over the employee during the unpaid period.

If the employee does any work during the California grace period, then they must be paid for it.

If employers put a grace period policy into place, but fail to follow California law regarding these policies, then they can be held liable through a wage and hour claim.

If you were expected to work on your grace period, even if only some of the time, you should discuss your case with an experienced Los Angeles wage and hour lawyer.

Your labor rights may have been violated. 

Get Help From Our Los Angeles, CA Wage and Hour Lawyers Today

At Workplace Rights Law Group LLP, our top-rated Los Angeles employment attorneys have extensive experience handling wage and hour claims. 

If you have questions or concerns about time clock laws or any other related issue, we are here to help.

To schedule a free, strictly private initial consultation, please call (818) 844-5200 or contact our law firm right away.

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Theo Khachaturian

Theo is a trial & appellate lawyer whose practice has emphasized wage-and-hour class actions, business disputes, wrongful termination, discrimination, harassment, and intellectual property theft. He has tried civil cases and argued before various California Courts of Appeal.