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When Rounding the Time Clock Clicks California Overtime

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Sacramento, CAIf you’ve been wondering if your employer is violating the California overtime law when your time clock punches are rounded to calculate hours worked, here is the answer, which favors the employer.

The California Court of Appeals recently held that rounding is lawful under California labor laws, but it has to meet certain conditions. The issue stems from a class-action overtime complaint filed in 2009 by Pamela Silva, an employee of See’s Candy Shops (Candy Shops, Inc. v. Super. Ct., Calif. Court of Appeals No. D060710, 2012). Silva alleged that See’s failed to pay its employees for all time worked, including overtime pay.

Silva and See’s employees had their schedules programmed into a software system called Kronos, which records employee’s work hours. Employees punch in to Kronos at the beginning and end of their shifts, and they are required to record lunch breaks. The Kronos punch records time to the actual minute, and therein lies the issue.

See's, like countless other employers, calculated their workers’ pay based on Kronos punch times, subject to adjustment under the nearest-tenth rounding policy and the grace period policy.

Under these two separate policies, Silva alleged that See’s owed its employees overtime compensation. The nearest-tenth rounding policy means that Kronos rounded in and out punches up or down to the nearest tenth of an hour (every six minutes beginning with the hour mark). For instance, if Silva clocked in a 7.58 am Kronos rounded her time to 8.00 am. And if she clocked in at 8.02 am, the system entered it as 8.00 am. Those two minutes could add up over time…

Under the grace period policy, Kronos had employees’ schedules programmed so they could voluntarily punch in and out up to 10 minutes before or after their scheduled start and end time. They could use this grace period for personal activities but weren’t allowed to work.

The class was certified on two issues:

1. Whether class members suffered a loss of compensation when they clocked in and out on the Kronos time-keeping system used by See’s (the nearest-tenth rounding policy)

2. Whether class members suffered a loss of compensation when they clocked in and out on the Kronos time-keeping system during the “grace period” (the grace period policy).

The trial court dismissed See’s defense that its nearest-tenth rounding policy was consistent with federal and state law. See’s appealed.

The Court of Appeals found that there was no California law that specifically authorizes the practice of time-rounding policies. The Department of Labor, however, has a regulation under the Fair Labor Standards Act (FLSA) permitting employers to use these policies under certain circumstances, as follows:

“For enforcement purposes this practice of computing working time will be accepted, provided that 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.” The court noted that the California Division of Labor Standards Enforcement (DLSE) has long adopted the DOL rounding regulation in its “Enforcement Policies and Interpretations Manual.”

Employers should note that if you practice such time-rounding policies, be sure that your policies are fair and neutral and that your employees’ start and stop times should average out. Visit the DOL for more information on rounding hours.

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READER COMMENTS

Posted by

on
I am being told by my employer that this practice is a "New" state law. I get to work a half hour early in case there is traffic as I drive 48 miles to get to work and punch Kronos when I get there so I don't forget. My employer is trying to force me to sign a waiver stating that I made a "Mistake" by punching in more than five minutes early, and threatening discipline if I do not sign the waiver every time this occurs. Others including myself have been doing the same routine for the past three years, and have always understood that we get paid from the time our shift starts, not our punch time. Is the practice of forcing an employee to sign a waiver and issuing discipline for not doing so illegal.

Posted by

on
I would like to know if an employer can edit your time due to a "No Overtime Policy"? When start of employment employees were not advised of a no over time policy but after an employee had three minutes of over time the owner edited the three minutes off and gave a warning that the employee will be written up if there is more over time.

Posted by

on
What if you suspect the store director is able to mess with the time clock/per computer to manipulate your punches I have seen them do it. How do you prove that the are not messing with your punches/lunch time?

Posted by

on
I am RN working as a per diem.
The agency started using Krono, computer clocking in and out. I worked from 3pm to next day till 2am.
The agency only gave me overtime from 11pm to midnight. Because the day falls in new day, I was paid regular payment from midnight to 2am.
Is this right?
Please help me.

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