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Avoid Costly Timekeeping Errors: California Supreme Court Says Employers May Not Round Meal Periods

On February 25, 2021, the California Supreme Court issued two important wage and hour rulings regarding meal periods: (1) under California law, employers cannot round time punches to the nearest preset time increment; and (2) time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations. In Donohue v. AMN Services, LLC, Plaintiff Kennedy Donohue worked as a nurse recruiter for AMN Services, LLC (“AMN”), a healthcare services and staffing company that recruits nurses for temporary contract assignments. Nurse recruiters were provided with 30-minute meal periods beginning no later than the end of the fifth hour of work.

AMN used a time keeping system that rounded time punches to the nearest 10 minute increment. For example, if an employee clocked out for lunch at 12:02 p.m. and clocked in after lunch at 12:25 p.m., the system would have recorded the time punches as 12:00 p.m. and 12:30 p.m.. Thus, the system would record a 30-minute meal period, even though the break was only 23 minutes.

Donahue filed a class action against AMN Services in 2014, alleging various wage and hour violations. Among other things, Donohue alleged that employees were prevented from taking their full lunch breaks, and claimed that the rounding policy resulted in employees being denied premium pay for breaks that were cut short.

Employers Cannot Round Time for Meal Periods
The case made its way to the California Supreme Court. The California Supreme Court opinion addressed two questions: (1) whether an employer may properly round time punches for meal periods, and (2) whether time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations.

First, the California Supreme Court found that rounding should not be applied to meal breaks. Given that the California Labor Code and wage orders have “precise time requirements” and that meal period provisions are designed to prevent even minor infringements, the Supreme Court reasoned that rounding is inconsistent with the purpose of the law. The rounding policy is not neutral, as “[i]t never provides employees with premium pay when such pay is not owed, but it does not always trigger premium pay when such pay is owed.”

Rebuttable Presumption of Meal Period Violation
Second, the Court held that noncompliant meal periods raise a rebuttable presumption of meal period violations. The Court noted that to rebut the presumption, AMN would need to provide evidence that employees voluntarily chose to work during off-duty meal periods that appear in time records to be short or delayed based on unrounded time punches. At AMN, employees were required to answer questions from a drop-down menu on the timekeeping system to identify whether it was the employee’s decision to have a late, missing, or delayed meal period.

Takeaway for Employers
Employers that use rounding policies for meal periods should change their timekeeping practices to record the exact time that employees start and end their meal periods. Furthermore, this decision essentially states that there is no “de minimis” exception to the 30-minute lunch rule, meaning that a meal period premium may be owed if the meal period is only 29 minutes long.

In addition, employers should consider implementing policies to require employees to identify whether each late, short, or missed meal period was due to (1) the employee’s choice; or (2) the employer prevented it. If the employee claims that it was not the employee’s choice, then the employee should be paid a meal period premium for those days. Having documentation that the employee affirmatively stated that the short, late, or missed period was by the employee’s choice, should help to rebut any assumptions regarding alleged meal period violations, if the case were ever litigated.

Employers should ensure that employees are provided compliant meal periods and should consult with a Meyers Nave Labor and Employment counsel about the best way to handle situations in which the records show noncompliant meal periods.