Employers May NOT Round Time Punches for Meal Breaks

Feb 26, 2021

By Nicholas Grether, Esq., The Maloney Firm, APC

The new year continues to bring big employment law news from the California Supreme Court. In January, the Court confirmed that the Dynamex decision on the rules for independent contractors will apply retroactively. See more on that ruling from the Maloney Firm here.

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On February 25, 2021, the California Supreme Court tackled the question of whether rounding time punches is appropriate for meal breaks. In Donahue v. AMN Services, S253677, employees claimed that sometimes they were not provided their meal breaks on time (before the end of 5 hours of work) and meal breaks were less than 30 minutes. Despite these alleged violations, the employees claimed they did not receive a premium wage of one hour of pay for not receiving a proper meal break.

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Rounding time punches is a common practice for employers to determine hours worked/overtime. As an example, a full-time employee is scheduled to work from 9:00 a.m. to 5:30 p.m. with a 30-minute lunch break. That employee clocks in at 8:58 a.m. and clocks out for the day at 5:30 p.m., with a lunch taken from 12:30 p.m. to 1:00 p.m. California allows employers to round an employee’s time punch in from 8:58 a.m. to 9:00 a.m., pay the employee for 8 hours worked, and not add 2 minutes of overtime. Similarly, if the employee clocked in at 9:02 a.m., the employer must also round that time punch to 9:00 a.m., for the rounding policy to be legal. Please note that employers should also keep the data of the actual time punches as well as any rounded time punches, but employers should avoid rounding if possible, to limit potential wage and hour liability.

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To its credit, AMN put systems in place to notify an employee that they might not have received a proper meal break, with an electronic prompt. However, the system only checked the rounded times, which were rounded to the nearest 10-minute increment. This led to a situation where an employee might clock out for a lunch break at 12:04 p.m. and clock back in at 12:26 p.m., but the system would round these to 12:00 p.m. and 12:30 p.m. This situation did not trigger the prompt to an employee to record an issue with a meal break or alert them that they were entitled to additional break time, since the system would see a 30-minute meal break. There were other ways for the employee to report a non-compliant meal break, but the electronic time record system would not notice a short or delayed meal break under some circumstances.  

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The Court then held that rounding could not be applied to meal breaks. They reasoned that providing an employee with an uninterrupted 30-minute meal break was mostly a concern for the employee’s health and safety, and thus a policy that allowed for shortened or delayed meal breaks was impermissible.

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The Court also cast some doubt on the viability of rounding time punches at all, stating that as “technology continues to evolve, the practical advantages of rounding policies may diminish further.” The Court noted that AMN’s timekeeping system took an extra step to convert time punches into the nearest 10-minute increment and then determine if a potential meal break violation had taken place. During oral argument, the justices pointed out the flawed premise of using the rounded time punches to determine if a violation had taken place. Although AMN submitted evidence that, over time, their practice of rounding meal period times resulted in overcompensation, the Court noted that the electronic time record system would still overlook situations where extra pay was owed for meal periods that were less than 30 minutes. The Court did not believe this was a neutral policy, as the pay lost at a premium rate during meal breaks shorter than 30 minutes would be far more money than the extra pay gained for time that was not worked during an extended meal break.

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What’s Next? 

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It remains absolutely critical for employers to accurately track and record employees’ time worked. The big takeaway is that meal breaks lasting less than 30 minutes and starting after 5 hours of work are violations, requiring the employee to receive an extra hour of pay. Employers should consult with counsel and their payroll service to make sure they are tracking employees’ actual time punches. Systems should be put in place to check for meal break violations based on actual time punches. If the records show a noncompliant meal break, an extra hour should be paid unless the employee certifies they were provided but chose not to take a compliant meal break. Managers and supervisors should be well-trained to ensure employees are provided compliant meal breaks so that violations can be avoided, premium wages for violations can be paid when appropriate, and there is proper documentation when an employee was afforded the opportunity to take a compliant meal break.

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About the Author:

Nicholas Grether is an employment attorney in the Employment Law Department at The Maloney Firm, APC. If you have questions regarding this article, contact Nicholas Grether at ngrether@maloneyfirm.com.


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