In California, an employer is entitled to round employee hours if the rounding policy is fair and neutral on its face and “it 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.” (Donohue v. AMN Services, LLC (2018) 29 Cal.App.5th 1068, 1083, quoting See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 907 (See’s).)
In Ferra v. Loews Hollywood Hotel, LLC, hourly employees challenged the employer’s electronic timekeeping system which automatically rounded time entries either up or down to the nearest quarter-hour. This policy was neutral on its face because it rounded all employee time to the nearest quarter-hour without an eye towards whether the employer or the employee benefits from the rounding.
The plaintiff, however, claimed the rounding policy was not neutral as applied because her time records showed she lost time by rounding in 55.1 percent of her shifts, but only gained hours 22.8 percent of the time. For a sample group of employees, paid time was reduced in 54.6 percent of shifts, but paid time was only added in 26.4 percent of shifts. Despite these differences, the court found that this was not sufficient to show that the rounding policy “systematically undercompensate[s] employees.”
The court’s decision reaffirms California’s commitment to allowing neutral rounding policies even though such policies may appear to reduce working hours in isolated time periods.