You may not be paid wages for all hours worked
You may not notice, but some employers round down work hours and pay lesser wages for hours other than those recorded. The so-called “rounding down” practice occurs when employers reduces to the nearest 5 minutes, or one-tenth of an hour, or quarter of an hour. Practiced through a period, unpaid wages may become significant.
Two recent decisions from the California Court of Appeal now makes clear that employees who are underpaid due to an employer’s rounding policy are entitled to recover those unpaid wages in court.
The so-called “rounding” practice derives from federal regulations that allow it so long as “it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” The California Court of Appeal adopted this reasoning in their 2012 decision in Silva v. See’s Candy Shops, Inc., which found rounding lawful “if the employer applies a consistent rounding policy that, on average, favors neither overpayment nor underpayment.”
But modern employer timekeeping systems have evolved to commonly used electronic methods that create accurate records of employees’ time worked. This undermines the supposed need for a rounding policy to address administrative difficulties in computing employee wages.
In Woodworth v. Loma Linda University Medical Centers, a Registered Nurse challenged the medical center’s policy of rounding time punches to the nearest one-tenth of an hour. Similarly, in Camp v. Home Depot U.S.A., Inc., Home Depot employees Delmer Camp and Adriana Correa challenged their employer’s practice of rounding their time punches to the nearest quarter of an hour. The employees in these cases argued that they should have been paid for all the hours reflected in the electronic timekeeping systems used by their employers. The Court of Appeal agreed.
The Court noted that “employers had developed rounding as a way to efficiently calculate hours worked and wages owed,” but that electronic timekeeping systems “recorded time worked to the minute and took the extra step of rounding that time,” such that it was “unclear what efficiencies the employer had gained from the practice.” As such, and because the practice of rounding has no support or basis in California law, the
Court found the practice of rounding unlawful if the employer uses a timekeeping system that allows it to accurately record actual time worked.
The Woodworth court explained: “Because the medical center could and did capture the exact number of minutes that employees worked, it must pay the employees for all the time worked.”
Employees who are not paid for all wages earned as reflected in their electronic timekeeping records, therefore, have viable claims to recover unpaid wages in court. If the amount due to a single employee is not significant to warrant an individual lawsuit, the remedy is to proceed with a class action to correct this unlawful employment practice.
As this can be confusing at times, it is smart to consult with an experienced employment attorney.
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The opinions, beliefs and viewpoints expressed by the author do not necessarily reflect the opinions, beliefs and viewpoints of the Asian Journal, its management, editorial board and staff.
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The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com. [For more than 25 years, C. Joe Sayas, Jr., Esq. successfully recovered wages and other monetary damages for thousands of employees and consumers. He was named Top Labor & Employment Attorney in California by the Daily Journal, consistently selected as Super Lawyer by the Los Angeles Magazine, and is a past Presidential Awardee for Outstanding Filipino Overseas.]
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