In California, it has long been the rule that an employer is entitled to use a rounding policy “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.’” (See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 907 (See’s Candy I), quoting 29 C.F.R. § 785.48(b) and citing Division of Labor Standards Enforcement (DLSE) Enforcement Policies and Interpretations Manual (2002 rev.) §§ 47.1, 47.2 (DLSE Manual). However, since that ruling in 2012, California courts have slowly chipped away at that rule. Most recently, the California Supreme Court held that rounding is not permitted for purposes of meal breaks. (See Donohue v. AMN Services, LLC, 11 Cal. 5th 58.) Now, a California Court of Appeal has determined a rounding policy that was otherwise neutral on both its face, and in application, to be unlawful. This ruling calls into question whether California employers may continue rounding employees time under any circumstance.
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