California employers may need to adjust the way they handle keeping track of their workers’ meal breaks, thanks to a new ruling by the California Supreme Court.
The ruling, issued Feb. 25, goes back to a 2014 case filed as a class action suit by Kennedy Donohue against her employer AMN Services, LLC, a healthcare services and staffing company out of San Diego.
California Supreme Court Justice Goodwin H. Liu wrote the opinion of the court:
In this case, we decide two questions of law relating to meal periods.
First, we hold that employers cannot engage in the practice of rounding time punches — that is, adjusting the hours that an employee has actually worked to the nearest preset time increment — in the meal period context. The meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding is incompatible with that objective.
Second, we hold that time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.
The judge specifically pointed to an example of a person who would be negatively affected by the timekeeping system AMN used. Their software, called Team Time, automatically rounded any time entries to the closest increment of 10 minutes. So, if someone clocked into lunch at 11:02 a.m. and out of lunch at 11:25 a.m., the system would have marked that lunch from 11 a.m. to 11:30 a.m. — a 30 minute “lunch” even though it was only 23 minutes.
According to Liu, every minute is valuable and needs to be properly recorded.
Another example he provided was of someone clocking into lunch at 12:04 p.m. and out at 12:25 p.m.. In this case, the lunch was only 21 minutes, but would be recorded as a full 30 minutes. That’s nearly a third of the employee’s break.
Because of the rounding in situations like those laid out above, the Team Time software used by the employer would therefore not trigger the “premium pay” owed to an employee under California wage law for not getting a proper (either full or no) meal period. The premium pay employees should get in these cases is an extra full hour of pay on their paychecks for each workday they didn’t get their full meal break.
California law says that 30-minute meal breaks are owed to an employee after five hours of work. Another is due after 10 hours of work.
“The regulatory scheme that encompasses the meal period provisions is concerned with small amounts of time,” Liu said. “Given the relatively short length of a 30-minute meal period, the potential incursion that might result from rounding is significant.”
Donohue had told the court in the form of her testimony that AMN “had an office culture that discouraged employees from taking full and timely lunches.”
Liu added even more about that necessity of the full meal breaks and need for employers to support those breaks.
“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,” he said. “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.”
Donohue also had a statistics professor weigh in on the case, and they found that the use of Team Time “resulted in the denial of premium wages for 40,110 short lunches and 6,651 delayed lunches during the class period, which totaled $802,077.08,” according to the court’s opinion.
AMN disputed the claim above. They pointed to their own expert witness’s findings: That the rounding of time evened out over time and actually resulted in the overcompensation of the class by 85 work hours.
“Donohue does not dispute that the rounding policy overcompensated the class by 85 work hours, as AMN’s expert concluded, when considering only compensation for time worked,” Liu wrote. “Instead, the issue is whether AMN’s rounding policy resulted in the proper payment of premium wages for meal period violations. AMN’s claim that it overpaid the class based on time worked does not address this issue.”
“AMN is asking to rob Peter to pay Paul,” William B. Sullivan of Sullivan Law Group APC said in a videoconference hearing, according to Law360.com. “I don’t think anyone anywhere would agree with that.”
Sullivan helped represent the class in this case.
A separate statement from those representing AMN sent to Law360 noted that they were “disappointed” in the ruling and they they think they will “ultimately succeed on the underlying merits of the case.”
Liu said that that supreme court ruling reverses the appeals court’s judgment. The case was sent back to appeals “to permit either party to bring a new summary adjudication motion.”