Metropolitan News-Enterprise


Thursday, February 14, 2013


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S.C. Denies Review of Ruling on Rounding-Off of Employee Time




The California Supreme Court yesterday denied review of a ruling that allows employers to use a timekeeping system that rounds off time worked by employees to the nearest one-tenth of an hour for the employer’s administrative convenience.

The justices, at their weekly conference in San Francisco, voted unanimously not to hear an appeal of the holding of the Fourth District Court of Appeal, Div. One, that such a system does not necessarily violate California wage and hour laws.

The court also denied a request by the plaintiff’s counsel to depublish the opinion.

The October 29 ruling granted a writ reinstating two affirmative defenses pled by See’s Candy Shops, Inc. in a class action by employees alleging that the manner in which See’s computes employee time illegally reduced their wages.

The action stems from the company-wide use of the Kronos electronic timekeeping system for hourly employees.

Up and Down

Kronos rounds off employee time to both greater and lesser intervals. For example, an employee who clocks in at two minutes past the hour would receive an hour’s pay for 58 minutes of work, but one who clocks in at four minutes past would receive 54 minutes’ pay for 56 minutes of work.

Also at issue in the suit is the company’s use of a “grace period,” which allows employees to clock in up to 10 minutes early, or clock out up to 10 minutes late, and use the time before their official starting time or after quitting time for personal activities, but not for work.

Employees are not paid for this early or late time unless they actually do company work, in which case a supervisor must make a manual record of the activity, but some employees claim that they actually did work during that time for which they were not paid.

A San Diego Superior Court judge has certified a class of all employees, other than those exempt from wage and hour laws or represented by a union, who have worked for See’s since October 2005, with respect to the rounding-off and grace-period issues. The plaintiff, Pamela Silva, also pled claims for violation of laws governing meal and rest periods.

Expert Testimony

In opposition to the class certification motion, See’s presented expert testimony that rounding actually worked to the employees’ benefit, providing them with, on average, nearly one minute of extra pay for every six shifts worked. The same expert subsequently opined that 59 percent of the employees benefitted from rounding, 33 percent had a net loss, and eight percent had no change.

He also opined that Silva had a net benefit in terms of time, offset by a nearly equal loss of overtime, so that she actually lost nothing as a result of rounding. Silva responded with her own analysis, showing that she had lost a net $725 in wages as a result of rounding.

After class certification was granted, See’s denied all allegations and pled 62 affirmative defenses, including that any unpaid amounts were de minimis, and that the rounding and grace period policies are authorized by state and federal law.

In the order overturned by the Court of Appeal, Judge Joel Pressman granted the plaintiff’s motion for summary adjudication that the rounding policy is not authorized by state and federal law and that it denies class members “full and accurate compensation.”

Justice Judith Haller, in her opinion for the Court of Appeal, concluded:

“Assuming a rounding-over-time policy is neutral, both facially and as applied, the practice is proper under California law because its net effect is to permit employers to efficiently calculate hours worked without imposing any burden on employees.”

Neutral Overtime

Haller noted that federal and state labor agencies have long treated rounding policies as lawful as long as they were neutral over time, rejecting the plaintiff’s claim that state law requires employers to “unround” every two weeks to ensure full pay. This is not what the Labor Code’s mandate that employees receive “all” of their earned wages each pay period means, the justice said.

The jurist went on to note that any underpayment of employees as a result of having worked during the grace period was not before the court because the plaintiff did not move for summary adjudication regarding those issues, and that the parties agree that any employees who actually worked during the grace period are entitled to be paid for the time.

The court’s ruling, Haller noted, “leaves open the issue whether the parties will prevail in proving their various claims and defenses relating to” the rounding and grace-period policies.

The case is See’s Candy Shops, Inc. v. Superior Court (Silva), D060710. 


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