Rounding Employee Time in California—Even Via Neutral Policy—Creates Risk Under New Appellate Decision

Although prior California decisions have approved neutral rounding systems, Camp v. Home Depot U.S.A., Inc. questions that law when an employer can track employee clock times to the minute. Therefore, employers in California that round time—but have the ability to record time clocked to the minute—should review their time rounding policies and carefully assess the impact of this decision.

Despite evidence of neutrality in Home Depot’s time-rounding practices, the California Court of Appeal held that the plaintiff in Camp raised a triable issue of material fact regarding his claim for unpaid wages. Home Depot’s timekeeping system retains the times employees clocked, and the clock time for one named plaintiff showed that his clock time was more than the rounded time for which he was paid.

Case Background

In Camp,[1] the Court of Appeal for the Sixth Appellate District reversed a trial court’s 2021 decision granting Home Depot summary judgment as to the wage claims of one of the named plaintiffs, Delmer Camp. Home Depot used a timekeeping system that captured all time clocked by nonexempt employees to the minute. The system rounded each employee’s total shift times to the nearest quarter-hour.

In March 2019, Camp filed a putative class action against Home Depot alleging that this rounding policy resulted in unpaid minimum wages and overtime. Home Depot moved for summary judgment on the grounds that its rounding policy was neutral on its face, neutral as applied, and otherwise lawful under the California Court of Appeal’s decision in See’s Candy Shops, Inc. v. Superior Court.[2] The See’s Candy court ruled that a rounding policy is lawful if it is neutral on its face and “is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” A subsequent court of appeal decision found that a rounding policy is lawful “where it results in a net surplus of compensated hours and a net economic benefit to employees viewed as a whole.”

The trial court in Camp granted summary judgment based on these decisions. Home Depot’s evidence proved that on balance, employees benefitted from rounding (they were paid more using rounded time than they would have received using clocked time).

Court of Appeal Decision

The appeals court reversed in an opinion that disagrees with See’s Candy and other similar decisions that permit rounding. The court relied on language from two recent California Supreme Court decisions, Troester v. Starbucks and Donohue v. AMN Services, LLC, to find that employees must be paid for all time worked. The court assumed that clocked time is work time, which is a matter that may be the subject of further litigation.  

In Camp’s own case, a comparison of clocked and rounded time showed a discrepancy of about seven hours of time over an approximately five-year period; the court found that this amount of time created a triable issue of whether Camp was paid for all the time he worked.

The court rejected Home Depot’s argument that calculation of wages and the display of hours on wage statements is “easier” with rounded time because there is “no provision in California law that privileges arithmetic simplicity over paying employees for all time worked.”

Notably, the court invited the California Supreme Court to address the validity of the rounding standard articulated in See’s Candy in the limited circumstance “where the employer can capture and has captured all the minutes an employee has worked” And then applies a rounding policy. The court also invited the state’s high court to generally “provide guidance on the propriety of time rounding by employers, especially in view of the ‘technological advances’ that now exist which ‘help employers to track time more precisely.’”

Practical Effect on Employers

The Camp decision increases the risk of litigation and potential liability for California employers that continue to use a time rounding system, especially where an employee timekeeping system retains clocked time to the minute.