Global Compliance Desk – California
California Supreme Court rules against Rounding of Meal Break Periods
On February 25, 2021, in Donohue v. AMN Services, LLC., the California Supreme Court passed the long-awaited judgment wherein it was ruled that employers are required to follow strict compliance with California’s Meal Break regulations in providing meal periods. In its judgment, the California Supreme Court specifically denounced the practice of rounding meal periods to the nearest time increment stating that a rebuttable assumption of liability applies to employers when time records indicate shortened, delayed, or missed meal periods by employees.
California’s meal period laws are regulated mainly by California Labor Code section 512 and the Industrial Welfare Commission Wage Order No. 4. According to the law, a non-exempt employee is eligible for a 30-minute meal break no later than the end of the 5th hour of work and another 30-minute meal break no later than the end of the 10th hour of work. The law does also stipulate certain conditions where a waiver of the meal period would be allowed (i.e. if the employee’s total work hours for the day are six hours or less, or if the total work hours are 12 hours or less and the first meal break has not been waived), however outside of these specific conditions should a meal period be missed, shortened, or taken too late the employer must provide the employee with 1 additional hour of pay at the employee’s regular rate of compensation.
The Lawsuit
The class-action lawsuit, Donohue v. AMN Services, LLC, was initially brought to court more than 5 years ago by a nurse recruiter who claimed that her employer’s policy of rounding meal period punch times to the nearest 10-minute increment caused pay reduction. AMN Services utilized an electronic timekeeping method that rounded time punches to the closest 10-minute interval. AMN used an electronic timekeeping system to track its employees’ compensable time up until 2015. Employees used their work desktop computers to punch in and out including at the beginning of the day, at the beginning of lunch, at the end of lunch, and at the end of the day.
If an employee clocked out for a meal break at 11:02 am and clocked back in at 11:25 am, AMN Services’ timekeeping system would record the meal period as 11:00 am to 11:30 am, effectively showing a break of full 30 minutes while the actual meal period was only 23 minutes.
AMN Services claimed its rounding policy was appropriate and in the above example would not pay a meal break premium.
Both sides went for summary judgment and AMN prevailed at first. In upholding the trial Court’s decision granting AMN’s motion, the Court of Appeal said in 2018 that unbiased rounding rule policies that are usually used to track hours worked for the purpose of calculating overtime compensation may be utilized when it comes to meal periods as well. But a few months later, the California Supreme Court granted an appeal for re-evaluation of the issue.
The Supreme Court’s Decision
On February 25, 2021, the Supreme Court of California passed the long-anticipated decision and held that employers cannot round punch times for meal periods.
For the purpose of the Wage Orders, the Court found that rounding potentially violates the accurate timekeeping requirement of an employee’s right to a complete 30-minute meal period. The Court opinioned that such a time rounding method does not produce an impartial effect as it essentially ignores shortened meal periods, which may go unreported.
The Court stated that the resulting shortening of the meal break period, even if by a few minutes, would carry the assumption that there is a violation of the meal break requirements.
The second major ruling contained in the Court’s decision states that when time records show potential non-compliant meal periods, a rebuttable presumption of liability is attached to the employer, thus assuming that the employer did not meet its obligations to provide the required meal period to the employee. Hence, the Court places the onus on the employer to shift the burden back to the employee by showing that discrepancies in recorded meal period times are the result of the employee’s choice rather than the employer’s failure to provide the required meal periods.
Responsibility of the Employer
The Supreme Court’s decision on Donahue highlights the significance of stringent compliance with California’s meal period requirements, including keeping accurate meal period records.
The employer should have policies to notify employees of the availability and duration of proper meal periods. Furthermore, employees should be provided with a full 30-minute meal break which begins prior to completion of the 5th hour of work (10th hour for the second break), where the start and end times are not rounded. The employer’s duty is to ensure that it provides the employee with bona fide relief from duty and that this is accurately reflected in the employer’s time records. Otherwise, the employer must pay the employee premium wages for any non-compliant meal period.
Employers may use a timekeeping system to track meal period violations as long as the system does not round time punches for meal breaks. Employers should utilize paper or electronic acknowledgment forms from employees that confirm that employees are taking their meal breaks and rest breaks on a daily basis or, to the extent they are not, that this is documented as either a voluntary decision by the employee or if not voluntary, that the employee is paid their statutory premium payment.
