Hunton Employment & Labor Perspectives

Many employers use rounding methods to adjust the hours that an employee works to the nearest time increment, such as every five or ten minutes.  The California Supreme Court has ruled, however, that this rounding practice is impermissible at the meal period.  Equally as troubling for employers, the Court also held that time records showing a noncompliant meal period raise a “rebuttable presumption” of meal period violations.

Background

On February 25, 2021, the California Supreme Court issued its decision in  Donohue v. AMN Services, LLC.  In Donahue, Plaintiff Kennedy Donohue worked as a nurse recruiter for AMN Services, LLC (“AMN”), a healthcare services and staffing company that recruits nurses for temporary contract assignments.  Nurse recruiters were provided with 30-minute meal periods beginning no later than the end of the fifth hour of work. AMN used a time keeping system that rounded time punches, so that if an employee clocked out for lunch at 11:02 a.m. and clocked in after lunch at 11:25 a.m., the system would have recorded the time punches as 11:00 a.m. and 11:30 a.m. Thus, although the actual meal period was 23 minutes, the system recorded the meal period as 30 minutes. Similarly, if an employee clocked in for work at 6:59 a.m. and clocked out for lunch at 12:04 p.m., the system rounded the time punches to 7:00 a.m. and 12:00 p.m. In that case, the actual meal period started after five hours of work, but the system would have recorded the meal period as starting after exactly five hours of work.

AMN moved for summary adjudication on plaintiff’s meal period violations claim. The trial court granted the motion, holding that AMN’s rounding policy fairly compensated employees over time, and there was insufficient evidence that AMN prevented employees from taking compliant meal periods. In addition, the trial court rejected Donohue’s argument that time records showing missing, short, or delayed meal periods gave rise to a rebuttable presumption of meal period violations. In the trial court’s view, this rebuttable presumption applied only at the class certification stage, not at the summary judgment stage. The Court of Appeal affirmed.

Employers May Not Properly Round Time Punches For Meal Periods

Plaintiffs appealed to the California Supreme Court, which reversed the decision of the Court of Appeal. The Supreme Court held that rounding time at the meal period is not proper.  The Court noted that the meal period regulations were enacted due to concern about working conditions, and the health and welfare of employees, and that the practice of rounding time punches for meal periods is inconsistent with these purposes “given that they set precise time requirements for meal periods, which is at odds with the imprecise calculations that rounding involves.”  The Court held that a “premium pay scheme that discourages employers from infringing on meal periods by even a few minutes cannot be reconciled with a policy that counts those minutes as negligible rounding errors.”

Time Records Showing Noncompliant Meal Periods Raise A Rebuttable Presumption Of Meal Period Violations

The Court also held that if time records show noncompliant meal periods, then a rebuttable presumption of liability arises, at the summary judgment stage, and “the employer may rebut the presumption with evidence of bona fide relief from duty or proper compensation.” In issuing this ruling, the Court noted that an employer’s assertion that it did relieve the employee of duty, but the employee waived the meal break, is not an element that a plaintiff must disprove as part of the plaintiff’s case-in-chief. Rather, it is  an affirmative defense, and thus, the burden is on the employer, as the party asserting waiver, to prove it. The Court explained that to “place the burden elsewhere would offer an employer an incentive to avoid its recording duty and a potential windfall from the failure to record meal periods.”

Takeaways For California Employers

Employers who use rounding practices at the meal period should review their policies and practices to ensure compliance with the Supreme Court’s decision.