See’s Candy & California Law – Rounding is OK…Sometimes

Wage Attorney on Rounding – California just came down with another big court decision. This one involves lots and lots of chocolate. In  See’s Candy Shops, Inc. v. Superior Court the California Court of Appeal addressed whether it is legal for an employer to round it’s employee’s time clock entries to the nearest tenth of an hour.

In See’s Candy, Plaintiff was employed in a non-exempt hourly positon by See’s Candies Shops. She filed a wage and hour class action lawsuit. The trial court granted her summary adjudication motion and dismissed four of See’s affirmative defenses. See’s challenged the dismissal of two of the defenses related to it’s policy of rounding employee punch in and out times to the nearest tenth of an hour.

How did this rounding policy work? For example, if an employee clocked in at 7:58 a.m., the system rounds the time to 8:00 a.m., and if the employee clocked in at 8:02 a.m., the system rounds down the entry to 8:00 a.m. The plaintiff argued that this rounding policy violated CA Labor Code sections 204 and 510 because the employees were shorted small amounts of wages.

The Court determined that See’s argument had merit because there was no CA statute or case law related to rounding, so the Court looked to the federal regulatory standard in the FLSA. Under that standard, employers are permitted to use a rounding policy as long as it does not consistently result in a failure to pay employees for time worked. An employer may use a nearest-tenth rounding policy if it is fair and neutral on its face and it is used in a manner than will not result, over time, in failure to compensate employees for the time they actually worked. See’s presented evidence that its rounding policy did not result in a loss of wages to employees over time.

By the way, this lawyer prefers…no loves the dark chocolate marzipan. It will blow your mind. Just saying….