What is an Illegal Rounding Policy?

May 16, 2018

Employment Law

Wage & Hour Violations

Does your employer have a policy of rounding your work hours? Such policies may be illegal if it results in a lower pay over time. The court in See’s Candy Shops, Inc. v. Superior Court held that though California employers may use a timekeeping policy that rounds employee punch in/out times, such policies must be “fair and neutral on its face” and “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, 210 Cal.App.4th 889, 908 (2012).

In that case, the employer’s rounding policy was fair and neutral because its “nearest-tenth rounding policy rounded both up and down from the midpoint.” and did not result in a loss of wages to employees. Id. at 913. Similarly, the court in Corbin v. Time Warner Cable held that the state of California and federal regulations allowing employers to “round” employees’ clock-in and -out times to the nearest quarter hour do not require all employees to break even for every pay period.  Corbin v. Time Warner Cable, 821 F.3d 1069, 1079 (9th Cir. 2016)

There, the plaintiff benefited from the employer’s rounding in some pay periods but did not in other pay periods. Nonetheless, the policy was satisfactory because it did not favor the employer “over the long term.” Id. at 1078. The employer is not required to show that every employee breaks even every pay period. Id. at 1079.

On the other hand, however, if the employer’s policies and procedures cause the rounding to generally favor the employer, the rounding policy is likely illegal.

In conclusion, if you think that your employer’s rounding policies are either 1. Not fair and neutral or 2. Negatively affects your pay, then you may be able to bring an action against your employer to challenge your employer’s policies.