California Court of Appeal Reverses Summary Judgment in Time-Rounding Case Involving Electronic Timekeeping System

In Camp v. Home Depot, a Sixth Appellate District panel recently found against an employer that—although its electronic system recorded employee work-time to the minute—rounded daily totals to the nearest quarter-hour for determining wages. The Court of Appeals panel emphasized that its decision was limited to the specific facts before it. It invited the California Supreme Court to weigh in on the debate involving time-rounding practices in view of recent technological advances that allow employers to track employee time worked more precisely.

Background

Plaintiffs Delmer Camp and Andriana Correa filed a putative class action against their employer, Home Depot, for unpaid minimum and overtime wages. Home Depot used the electronic timekeeping system "Kronos" which captured actual worktime by the minute. Despite this fact, Home Depot rounded its hourly employees' total daily worktime to the nearest quarter hour. The timekeeping records revealed that Mr. Camp had lost a total of 470 minutes over approximately four and a half years as a result of Home Depot's rounding policy. Ms. Correa conceded the records showed she was actually overpaid as a result of the employer's rounding policy, and her appeal was ultimately dismissed.

Home Depot moved for summary judgment, contending its time-rounding practice was neutral on its face and neutral as applied, and therefore lawful under the standard articulated in See's Candy Shops, Inc. v. Superior Court, a 2012 California Court of Appeals (4th Appellate District) decision. The trial court agreed and granted Home Depot's motion based on See's Candy.

Court of Appeal Decision

Mr. Camp appealed. On October 24, 2022, a panel for the Sixth Appellate District reversed the trial court's summary judgment order.

Noting that the California Supreme Court has never rendered a decision on the validity of the rounding standard articulated in See's Candy, the Sixth Appellate District chose to take guidance and direction from two more recent California Supreme Court opinions, Troester v. Starbucks Corp. (2018) and Donohue v. AMN Services, LLC (2021). In Troester, the Supreme Court found that the California Labor Code and wage order provisions clearly emphasize that employees must be paid for all work performed and all hours worked. In Donohue, the Supreme Court acknowledged that technological advances in timekeeping have helped employers track time more precisely and diminished the practical advantages previously associated with time-rounding.

The Sixth Appellate panel concluded Home Depot did not meet its burden on summary judgment to show that there was no triable issue of material fact regarding Mr. Camp's claims for unpaid wages, because Home Depot did track—to the minute—the exact time an employee worked, and those records did show that Mr. Camp was not paid for all the time he worked. Emphasizing that its decision is limited to the particular facts of this case, the panel specifically acknowledged that its analysis did not reach other circumstances, such as "when an employer uses a neutral rounding policy due to the inability to capture the actual minutes worked by an employee" or "whether an employer who has the actual ability to capture an employee's minutes worked is required to do so." However, the Sixth Appellate panel invited the Supreme Court to decide the validity of the rounding standard articulated in See's Candy with regard to both the limited circumstances in Camp as well as generally, given the technological advances in timekeeping.

Next Steps for Employers

It appears likely that the California Supreme Court will weigh in on the validity of the state's time-rounding standard, given that there are now arguably conflicting decisions at the court of appeal level between See's Candy and Camp. In the meantime, California employers who use time-rounding policies would be wise to consult with legal counsel and, if they also use electronic timekeeping systems that capture actual time worked, discontinue use of any time-rounding policies until a final decision is rendered.

Employers can refer to the following advisories previously published by DWT:

• California Supreme Court Rules Against Rounding Meal Periods
• "Rounding” Employees' Hours Worked Remains Risky in California

DWT will continue to monitor this case to see if the California Supreme Court accepts review and will provide updates on all developments as they arise. In the meantime, if you have any questions about your company's timekeeping polices and compliance, please contact a member of DWT's Employment Services Group.