Rounding is the practice of capturing time entries on a time clock and converting them to the closest five, ten, or fifteen minute equivalent. For example, both entries at 8:58 and 9:04 may be converted to 9:00 a.m. A recent California Court of Appeal decision, Camp v. Home Depot U.S.A., Inc., calls into question the continued viability of time-rounding policies in California. In 2012, the Court of Appeal held in See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012), that an employer’s time rounding policy is lawful under California law when the policy is “fair and neutral on its face” and is used in a way that will not result, over a period of time, “in failure to compensate the employees properly for all the time they have actually worked.” As generally applied, the See’s Candy test permitted time clock rounding systems so long as the rounding was to the nearest set increment as opposed to always rounding against the employee. Multiple appellate decisions after See’s Candy cited it favorably in granting summary judgment to the employer.
Michael Campbell is a partner in the Labor and Employment Practice Group in the firm's Century City office.
In 2018, California passed Senate Bill 820, the STAND Act (Stand Together Against Non-Disclosure Act), in response to the #MeToo movement. SB 820 prohibited the use of confidentiality provisions in settlement agreements where the underlying claims were based upon sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. The law did not extend to claims based upon other protected characteristics. Therefore, a confidentiality provision in a settlement agreement could not prevent an individual from discussing the factual information related to sexual harassment or sex discrimination allegedly experienced in the workplace, but could preclude an individual from discussing factual information related to harassment or discrimination based upon any other protected characteristic (e.g., race, age, gender, etc.). You can read our prior blog article here.
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In a prior article, we explained Senate Bill 95, which requires employers with more than 25 employees in California to provide COVID-19 Supplemental Paid Sick leave. You can read it here. SB 95 creates California Labor Code Sections 248.2 and 248.3. It goes into effect on March 29, 2021, and applies retroactively to January 1, 2021. This new COVID-19 Supplemental Paid Sick Leave law allows covered employees to take up to an additional 80 hours of paid COVID-19 related sick leave.
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Beginning on March 29, 2021, Senate Bill 95 will place additional requirements on employers to provide supplemental paid sick leave to employees impacted by COVID-19. The bill, which was approved by the legislature on March 18, 2021, and signed by Governor Gavin Newsom on March 19, 2021, creates California Labor Code Sections 248.2 and 248.3. SB 95 dramatically expands the number of employees eligible for COVID-19 paid sick leave, expands the reasons an employee may take paid sick leave, and applies retroactively to January 1, 2021, which will require some employers who previously granted employees unpaid leave for COVID-19 related reasons to retroactively compensate those employees. Therefore, every employer in California should review SB 95 carefully.
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In Alfredo Sanchez v. Miguel Martinez, the Court of Appeal, Third Appellate District, held that although an employee who is not authorized and permitted to take a paid 10-minute rest break in compliance with California law may assert a claim for either unpaid wages or seek one additional hour of pay (i.e., a rest break premium) under Labor Code Section 226.7, the employee cannot recover damages under both theories. All California employers will find this case instructive, as it may also provide a basis to argue against similar “double recovery” and/or “stacking” of penalties predicated on other Labor Code violations.
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The California Worker Adjustment and Retraining Notification (WARN) Act (Labor Code Section 1400 et seq.) sets forth procedural requirements that a covered employer must follow prior to a mass layoff, relocation, or termination. On March 17, 2020, California Governor Gavin Newsom issued Executive Order N-31-20, concerning COVID-19 and the conditional suspension of certain requirements under California WARN. The Order can be found here, and you can read our prior analysis about the Order’s effect on commercial drivers here. Governor Newsom ordered the Labor and Workforce Development Agency to provide guidance about the suspension of the WARN requirements.
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Massachusetts issued a revised Essential Services and Revised Gatherings Order that goes into effect at noon on March 24, 2020. The Order is set forth here. The Order requires that all businesses and organizations that do NOT provide “COVID-19 Essential Services” are to close their physical workplaces and facilities to workers, customers and the public from Tuesday March 24, 2020 at noon until Tuesday April 7, 2020 at noon.
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Ohio issued a Stay at Home Order that goes into effect at 11:59 p.m. on March 23, 2020. It will remain in effect until 11:59 p.m. on April 6, 2020, unless rescinded or modified. The Order is set forth here. Like many other states, the Order generally includes the following directives:…
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On October 9, 2019, the Second Appellate District of the California Court of Appeal issued a decision clarifying the rate of pay at which an employer must pay meal period, rest break, and recovery period premiums. More specifically, the appellate court answered the question: what does the “regular rate of compensation” in Labor Code Section 226.7(c) actually mean? In Ferra v. Loews Hollywood Hotel, LLC, a 2-1 majority of the Court of Appeal affirmed the trial court’s holding that in paying meal period and rest break premiums, the regular rate of compensation is equal to one hour of the employee’s base hourly wage and is not synonymous with the “regular rate of pay” used to calculate overtime payments. This clarification is important to every employer in California.
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After two years, California courts are finally putting California’s “A Fair Day’s Pay Act” (the “Act”) to the test. While intended to help employees collect judgments against employers that are judgment proof, the Act created potential personal liability for an employer’s owners, directors, officers, and managing agents. Indeed, the Act added Labor Code Section 558.1, which imposes personal liability for certain wage and hour violations. Specifically, Section 558.1 states that “[a]ny employer or person acting on behalf of an employer, who violates, or causes to be violated,” provisions regulating wages or hours, may be held personally liable “as the employer.” Section 558.1 expressly defines “employer or other person acting on behalf of an employer” to include a “natural person who is an owner, director, officer, or managing agent of the employer.” Accordingly, potentially any managing agent who “causes” a wage and hour Labor Code provision to be violated could be held personally liable. While the passing of Section 558.1 caused uproar over the imposition of personal liability for wage and hour violations, the California Court of Appeal recently clarified that even in the absence of this new section, the labor code imposes personal liability.
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In AHMC Healthcare, Inc. v. Superior Court, the California Court of Appeal, Second Appellate District, Division Four, extended a prior line of California cases holding that California law follows federal law with respect to evaluating the lawfulness of time clock rounding systems. You can read our prior article about See’s Candy Shops I here. Specifically, California follows 29 C.F.R. § 785.48, which permits employers to compute employee worktime by rounding “to the nearest 5 minutes, or the nearest one-tenth or quarter of an hour,” so long as the rounding system adopted by the employer “is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.”…
Continue Reading California Court Reaffirms And Extends Rounding Rules