Many employers round employees’ time using predetermined intervals, such as rounding to the nearest five minute or fifteen-minute increment. While this is common practice, a recent California Court of Appeal decision[1] held that rounding employee time is no longer permitted under California law.

In that case, Home Depot employees filed a class action lawsuit alleging that Home Depot’s time rounding policy resulted in unpaid minimum wages and overtime wages. The rounding policy at issue rounded all non-exempt employees’ time to the nearest quarter-hour. Home Depot argued that the policy did not violate any labor laws because it was neutral on its face and as applied. Home Depot relied on two prior court decisions to support its argument and also provided evidence that the rounding policy benefitted the employees as a whole.

The trial court agreed with Home Depot’s argument and ruled in its favor. The plaintiffs then appealed the decision, and the Court of Appeal reversed the trial court’s decision. In reaching its decision, the Court of Appeal disagreed with the two prior cases and held that time when an employee was clocked in was working time. The Court of Appeal noted that it did not matter that rounding time is simpler and easier to calculate. The Court further noted that it is now easier for employers to precisely track employees’ time down to the minute because of technological advancements.

In light of the Court’s decision, employers should update their time tracking policies so that employees’ time is not rounded. This is particularly true for employers who use software or other advanced technology to track employee time, rather than using old fashioned methods such as handwritten timecards. Companies with questions regarding their time tracking policy should consult with Navigato & Battin.

[1] Camp v. Home Depot U.S.A., Inc.