The Evolving Principles of Work Time Rounding Practices 

For decades, California has recognized the validity of “rounding” employee hours to the nearest five minutes, one-tenth or quarter hour, plus or minus, as an “efficient” and “practical” way to calculate pay as long as the practice did not deprive workers of their compensation over time. However, electronic technology’s advances may reduce rounding to an historical relic.

The 2012 See’s Candy Shops, Inc. v. Superior Court decision confirmed time-rounding as an acceptable “method for calculating work time and can be a neutral calculation tool for providing full payment to employees … Assuming a rounding-over-time policy is neutral, both facially and as applied, the practice is proper under California law because its net effect is to permit employers to efficiently calculate hours worked without imposing any burden on employees.”

Perhaps the way of hardline phones and snail mail, such methods may soon  prove quaintly out-of-date.  The  California Supreme Court 2021  Kennedy Donohue v. AMN Services, Inc.decision signaled that horizon.

While finding time-rounding improper for measuring the 30-minute meal break required by Labor Code 512 and the Industrial Wage Orders – but cautioning that it was not outlawing the practice for the beginning and end of any daily work shift – the Court observed that rounding’s  practical advantages continue to weaken as the ability to track exact work time electronically continues to advance.

Just as populations now widely use their smart phones for business communications and financial transactions rendering paper interchange obsolete, e-timekeeping and payroll systems may soon supersede manual time and pay calculations altogether.

Take Away: For now, rounding remains, at least for measuring the start and conclusion of the work day.  Management should clearly state any such practice and ensure full fairness to workers in application.  However, with vastly more efficient and precise electronic means for tracking work time a virtual certainty, employers should consider transition to the “e-side” sooner than later.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Happier and Healthier – Workplace Policy Handbook & Forms for 2022 (April 29, 2022)
• Square Meal is the Deal – California Supreme Court Prohibits Meal Break Time Rounding (April 21, 2021)
• Wage Calculation 101 – A Guideline for Proper Time Rounding Policies under California and Federal law (August 19, 2016)

Tim Bowles
June 24, 2022