Employers’ “Rounding” of Time Entries Resulting in Shortened Meal Breaks Requires Premium Pay to Employees

On February 25, 2021, the California Supreme Court issued an important decision holding that employers cannot use “rounding” of time entries when providing mandatory meal breaks if the rounding results in less than the required break period.  In California, employers generally must provide non-exempt employees with a 30-minute meal period for any work period of more than five hours.  If the employer fails to do so, the employee is entitled to an additional hour of pay for each workday that a meal period is not provided.  The Court's decision, Donahue v. AMN (available here), may require employers to change their use of rounding. 
 
Plaintiffs filed a class action lawsuit against AMN, a healthcare services and staffing company, alleging meal break violations under California law.  Defendant had a time-keeping policy of rounding to the nearest 10-minute increment when employees clocked in and out for their shifts and lunch breaks.  For example, if an employee clocked out for lunch at 12:04PM and clocked back in at 12:25PM, the entries would adjust to 12:00PM and 12:30PM, such that a 21-minute lunch would appear in the employer’s records as a 30-minute lunch not triggering a missed break premium.
 
The California Supreme Court held that rounding practices that deny an employee a full and timely meal break are inconsistent with legislative intent.  The Court reasoned that the precision of the time requirements in California’s meal break laws – “not less than 30 minutes” and “five hours per day” or “ten hours per day” – is at odds with the imprecision of rounding.  The Court noted that even small rounding errors are a “significant infringement” on the right to a 30-minute meal period.
 
Additionally, the Court held that records showing non-compliant meal periods raise a rebuttable presumption of meal period violations, applying to records that show missed meal breaks as well as shortened or delayed meal breaks.  The presumption goes to the question of liability and applies at the summary judgment stage, not only at the class certification stage as Defendant had argued.  The Court emphasized that uncertainty of proof caused by an employer’s failure to keep accurate records is a burden that falls on the employer, not the employee.