California Justices Put End to Meal-Break Rounding by Employers

Employees must be free to take 30-minute meal breaks, the California Supreme Court ruled, and rounding breaks to the nearest 10 minutes could result in some employees being underpaid for shortened breaks.

(Image by Foto-Rabe from Pixabay)

SAN FRANCISCO (CN) — Employers cannot round meal breaks to the nearest 10-minute increment, the California Supreme Court ruled Thursday, reversing a lower court’s decision that the practice doesn’t violate California labor law.

Kennedy Donohue worked as a nurse recruiter at health care staffing firm AMN Services’ San Diego office from September 2012 to February 2014. 

In a class action she brought against AMN in April 2014, Donohue said the company discouraged employees from taking their full lunch breaks, and claimed that a time-keeping system that rounded lunch periods to the nearest 10 minutes resulted in employees being denied premium pay for breaks that were cut short.

“It was a sales job so it was a fast-paced environment, and on many occasions she was just too busy to be able to get breaks on time or get her full amount of breaks, and time records reflect that,” her attorney Eric Yaeckel with the San Diego-based Sullivan Law Group said by phone Thursday, adding that the court’s decision “will help ensure California workers receive the protections they deserve.”

A state appellate court ruled in favor of AMN in 2018, finding the policy to be a “practical method” for employers to calculate work time and that AMN wasn’t using it in a way that deprived employees of pay for actual hours worked. 

The court applied the standard set by See’s Candy Shops, Inc. v. Superior Court, which determined that rounding is not unlawful as long as it is neutrally applied and “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.”

But in a 34-page opinion, the high court found rounding shouldn’t be applied to meal breaks even assuming the neutrality standard is valid.

While AMN argued the policy sometimes led to employees being paid for a few extra minutes when they did not work, the high court said it doesn’t properly account for the loss of premium pay for missed or shortened 30-minute lunch breaks. AMN uses Team Time, which doesn’t give employees the option of notifying AMN that their meal breaks had been involuntarily shortened or delayed.

California labor code requires employers to furnish employees with  “premium pay” in the form of up to one additional hour of pay for any missed meal or rest break.

So while a 38-minute lunch from 11:55 a.m. to 12:33 p.m. would be recorded as a 30-minute lunch from 12:00 p.m. to 12:30 p.m., a 21-minute lunch recorded as 30 minutes would cause the employee to be underpaid. 

“In this respect, the rounding policy is not neutral. It never provides employees with premium pay when such pay is not owed, but it does not always trigger premium pay when such pay is owed,” Justice Goodwin Liu, a Jerry Brown appointee, wrote for the unanimous court. 

Liu posed the following scenario in Thursday’s ruling: “Consider, for example, an employee who is provided with a 21-minute lunch from 12:04 p.m. to 12:25 p.m. Under AMN’s timekeeping system, which rounded time punches to the nearest 10-minute increment, the lunch would have been recorded as a 30-minute lunch from 12:00 p.m. to 12:30 p.m.

“In that scenario, an employee would have lost nine of the 30 minutes — or almost a third of the time — to which he or she was entitled, and Team Time would not have flagged the lunch as a meal period violation. Small rounding errors can amount to a significant infringement on an employee’s right to a 30-minute meal period,” he wrote. 

“By requiring premium pay for any violation, no matter how minor, the structure makes clear that employers must provide compliant meal periods whenever such a period is triggered. This corroborates the conclusion that rounding is improper here. A premium pay scheme that discourages employers from infringing on meal periods by even a few minutes cannot be reconciled with a policy that counts those minutes as negligible rounding errors.”

Moreover, even small infringements on an employee’s meal or rest break can have harmful effects workers’ health and well-being.

“Shortening or delaying a meal period by even a few minutes may exacerbate risks associated with stress or fatigue, especially for workers who are on their feet most of the day or who perform manual labor or repetitive tasks,” Liu wrote. “Further, within a 30-minute timeframe, a few minutes can make a significant difference when it comes to eating an unhurried meal, scheduling a doctor’s appointment, giving instructions to a babysitter, refreshing oneself with a cup of coffee, or simply resting before going back to work.”

Yaeckel said this is an important point. “We think the court was correct finding that even minor infringements on meal period requirements should not be tolerated,” he said.

The justices remanded the case to the trial court, where the meal period claim will have to be litigated again.

“As to the meal periods that are short or delayed based on unrounded time punches and for which no premium wages were paid, did the employees voluntarily choose to take short or delayed meal periods? On remand, the parties will have the opportunity to present evidence bearing on this question,” Liu wrote.

Yaeckel said the ruling could have far-reaching implications for employment cases concerning meal and rest break violations.

“That’s probably why the Supreme Court agreed to take the issue up,” he said. “We’ve seen a lot of cases where records show meal periods were missed altogether or were late. I think the Supreme Court’s ruling is going to strengthen an employees’ position when they do have that claim that they were getting denied proper breaks and the records show it.”

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