The Ninth Circuit Affirms Employer’s Time-Rounding Practice
The Ninth Circuit recently reaffirmed the lawfulness of employer time rounding policies that are both facially neutral and neutrally applied in Corbin v. Time Warner Entertainment Advance/Newhouse Partnership , May 2, 2016. In that case, the plaintiff claimed Time Warner Entertainment Advance/Newhouse Partnership’s (TWEAN’s) rounding policy, which rounded employee time stamps to the nearest quarter hour, deprived him and other similarly situated employees of overtime pay.
TWEAN’s time clock system rounded employee time punches to the nearest quarter hour when they clocked in for the day, out and back in for lunch, and then out at the end of the day. For example, when employees clocked in at 8:07 a.m. their wage statement would reflect a clock-in of 8:00 a.m. Similarly, if employees clocked out at 5:05 p.m. their wage statements would reflect a clock-out of 5:00 p.m. From the time the TWEAN timekeeping system was put into place until the plaintiff resigned, he had worked 269 shifts and claims he lost a total of $15.02 of aggregate compensation.
The Ninth Circuit found that TWEAN’s rounding policy was neutral on its face and consistent with the relevant state and federal authorities. The Court recognized that federal regulations permit employers to efficiently calculate hours worked without imposing any burden on employees, offering employers a “practical method for calculating work time and a neutral calculation tool for providing full payment to employees.” Citing to California and federal authorities, the Ninth Circuit confirmed that the federal rounding rule applies to California state wage claims so long as the rounding is neutral both facially and as applied. In rejecting the plaintiff’s argument, the Court noted that his interpretation would require employers to engage in calculations that the federal rounding regulation served to avoid, thereby eviscerating the purpose of the rounding tool.
Following the California Court of Appeal decision in See’s Candy v. Superior Court, the Ninth Circuit rejected plaintiff’s claim that rounding made him miss out on pay at daily overtime rates on days when his time was rounded down. The Court noted that a rounding policy “allows employees to gain overtime compensation just as easily as it causes them to lose it.”
While this decision comes as continued good news on the rounding front, employers are reminded that they should consult counsel before implementing rounding policies to help ensure the policies are facially neutral and neutrally applied. In other words, over a period of time the policy should not disproportionately benefit the employer.