California’s Supreme Court recently issued a significant decision concerning California meal periods for employees. In California, in general, employers must give employees with a 30-minute meal period after at least the fifth hour of work and after at least the tenth hour of work. If an employee is not provided a compliant meal period, then the employer must pay the employee an additional hour of pay at the regular rate for each workday during which the meal period was not provided. In practice, many employers round time punches to the nearest quarter of an hour, one-tenth of an hour, or five minutes.
In the case before the Court, the Court considered whether rounding time was permissible in the context of a meal period. In the case of a named plaintiff in the class-action lawsuit, the plaintiff’s employer used a timekeeping system that rounded the time punches to the nearest 10-minute increment. So if an employee clocked out for lunch at 11:02 and clocked in at 11:25, it would be recorded as 11:00 and 11:30. Thus, the employee’s meal period was only 23 minutes, as opposed to the full 30 minutes. An expert estimated that the use of the timekeeping system resulted in a denial of premium wages for short and delayed lunches amounting to over $800,000.
The Court maintained that employers could not round time in the context of meal periods. The court held that time rounding does not comply with the precise time requirements set out in Labor Code section 512 and Wage Order No. 4. The court reasoned that the relatively short length of a 30-minute meal period means that the potential incursion on that period is significant. The court held that the provisions concerning meal periods are intended to prevent even minor infringements on the meal period requirements, and rounding time does not meet that objective. The court held that even if the employer overpaid the members of the class for actual work based on the timekeeping, the issue is whether the rounding policy resulted in the proper payment of premium wages for meal period violations. The court also held that if an employer’s records indicate that no meal period was taken for a shift over five hours, there is a rebuttable presumption that the employee was not relieved of duty and no meal period was provided. Thus, the employer can assert this as a defense, and it is the employer’s burden to plead and prove that assertion.