At the request of the California Chamber of Commerce, the California Supreme Court ordered a review of a trial court decision to clarify whether rounding employees’ time card entries is legal.  

Previously, CalChamber urged the 4th District Court of Appeal to grant a petition by See’s Candy Shops, Inc. to review a San Diego County Superior Court decision that the practice of rounding employee time entries to the nearest six minutes violates California law.

Employers have long relied on the position of the U.S. Department of Labor (DOL) and state Division of Labor Standards Enforcement that rounding is a lawful practice, the CalChamber said in its October letter to the 4th District Court of Appeal, and that approval is reflected in DOL regulations and the California Labor Commissioner’s enforcement policy, which follows the DOL regulations.

The issue of rounding time card entries is a matter of widespread concern to California employers, and the CalChamber regularly receives inquiries from its members concerning the rounding of time card entries. 

Some class action lawsuits already have been filed in California by plaintiffs alleging that rounding is illegal and seeking damages and penalties under the Private Attorneys General Act (PAGA). Many employers will feel they have no choice but to stop their practice of rounding time to avoid the risk of class litigation.

After extensive research, the CalChamber concluded that the California Labor Code does not prohibit rounding and no California appellate decision has held that rounding is illegal. The CalChamber believes it would be best for this issue to be resolved now so California businesses will have certainty regarding this important timekeeping issue.

Author: Erika Frank, CalChamber Vice President and General Counsel

HR Watchdog, HRCalifornia’s Employment Law Blog, © California Chamber of Commerce.