Appellate Court Agrees With CalChamber: Rounding Policies OK in California

This week, the Fourth District Court of Appeal issued an employer-friendly opinion by concluding that, under California law, employers may round employee timecard entries to the nearest-tenth of an hour.

This ruling is particularly important because there is no statute or prior case law that explicitly authorizes this common practice, a practice that is permissible under federal law and followed by California’s labor agency.

In the case, Silva v. See’s Candy Shops, Inc., See’s utilized a timekeeping software system to keep track of its employee’s working hours. The software system required employees to “punch” into the system at the beginning and end of their shift. Adjustments to the timecards were made only in accordance with two See’s policies:

• The nearest-tenth rounding policy; and 
• The grace period policy. 

A class action lawsuit was brought by a former employee challenging these two policies. See’s was able to demonstrate that its nearest-tenth rounding policy went up and down and, that the policy, over time, did not result in a loss to the employee. Additionally, See’s was able to present evidence that employees knew about the rounding and grace period policies. 

Because See’s policies were clear and understood by its employees and because See’s could show that the policies did not result in the underpayment to its employees, See’s prevailed in the action.

CalChamber joined the Employers Group and the California Employment Law Council in filing an amicus brief with the court that rendered this favorable decision. CalChamber recognized that the issue of rounding time entries is a matter of widespread concern to California employers and was concerned that the lower court ruling could lead to even more class action lawsuits.

Erika C. Frank, CalChamber Vice President and General Counsel