On February 25, the California Supreme Court decided the case of Donohue v. AMN Services, LLC, an influential decision that now sets the standard at which California employers will be held to for establishing meal period policies and practices. The case specifically addressed the validity of an employer’s rounding of an hourly employee’s time taken for meal periods.

The plaintiff filed a class action against her employer for failure to pay premium wages for meal periods that did not comply with California’s labor code, which establishes that employees be given “one 30-minute meal period that begins no later than the end of the fifth hour of work and another 30-minute meal period that begins no later than the end of the tenth hour of work.” The defendant, a healthcare services and staffing company that recruits nurses for temporary contract assignments, used a timekeeping system called Team Time which rounded employees’ time punches for meal periods to the nearest 10-minute increment. “For example, if an employee clocked out for lunch at 11:02 a.m. and clocked in after lunch at 11:25 a.m., Team Time would have recorded the time punches as 11:00 a.m. and 11:30 a.m. Although the actual meal period was 23 minutes, Team Time would have recorded the meal period as 30 minutes.”

The Court stated, “We hold that employers cannot engage in the practice of rounding time punches — that is, adjusting the hours that an employee has actually worked to the nearest preset time increment — in the meal period context.” If an employee’s meal period needs to be rounded up to 30 minutes, then that employee’s meal period was not in compliance with the labor code. They noted that in the past, rounding was once useful to efficiently calculate the approximate hours an employee worked. However, advances in timekeeping technology have made it possible to track employee time down to the minute. The Opinion of the Court also stated, “We hold that time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.”

Employers must ensure they are utilizing practices and procedures that permit the necessary degree of specificity in employee timekeeping. To read the decision in its entirety, click here. For any questions, please reach out to David Kahn at dkahn@kschanford.com.

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