For a long time, the rule in California was that employers could legally round employee time punches to the nearest five minutes, one-tenth or one-quarter of an hour. However, two recent Court of Appeal decisions have questioned that long-standing rule. First, in 2022, in Camp v. Home Depot U.S.A., the court held that rounding to the nearest quarter hour was illegal because employees must be paid for all hours worked. This decision was appealed to the California Supreme Court, and we are waiting to see what the Supreme Court does with the issue.
In the meantime, in July 2023, the court of appeal ruled, in the Woodworth v. Loma Linda University Medical Center case, that the employer’s policy of rounding employees’ punches down to the nearest tenth of an hour violated California law, which requires that employees be paid for all of their time worked.
The Supreme Court will resolve this issue at some point, but it has not done so yet. In the meantime, it is a good idea for employers in California not to round employees’ time but rather to pay employees minute to minute (or, if an employer wants to round, always round up so that the employee gets paid more than the time they worked. As the Supreme Court ruling in Home Depot may have a retroactive effect, it’s important to be cautious now, even before the court rules.