The California supreme court recently decided on two important wage and hour issues in Donohue v AMN Services, LLC. First, the court decided on whether rounding time punches for meal periods is permissible under California law. Secondly, the court decided on whether a rebuttable presumption of meal period violations arises at summary judgement if time records show noncompliant meal periods without indication of proper compensation. The California Supreme Court’s decision favors the employee on both issues.
Rounding time for meal periods circumvents the legislative requirement that employers pay the employee full premium wage for meal period violations.
According to Labor Code, § 512, subdivision (a), as well as the Industrial Welfare Commission (IWC) wage order No. 4-2001, § 11(A), rounding meal periods to the nearest 5-minute increment, 10-minute increment or quarter of an hour infringes on the meal period requirements protected by California Labor Code and wage order. Accordingly, employers must provide employees with a 30-minute, uninterrupted meal period that begins at the end of the fifth hour of work and another 30-minute meal period that begins at the end of the tenth hour worked.
Under the applicable statute and wage order, employers may not round an employee’s meal period time to the nearest 5-minute increment, 10-minute increment or quarter of an hour when the employee has a short or delayed meal period. For example, if an employee clocks out for their meal period at 12:05 p.m. and then clocks in from their meal period at 12:25 p.m., an employer may not round the time the employee clocked out for their meal period to 12:00 p.m. and the time the employee clocked back in from their meal period to 12:30 p.m. to reflect a 30-minute meal period. When the clock in time and/or the clock out time is rounded, the actual time punches do not appear as short or late. Consequently, rounding circumvents the legislative requirement that employers pay the full premium wage for meal period violations.
Based on section 226.7(c) of the Labor Code, if an employer does not provide an employee with the opportunity for a full 30-minute meal period, then “the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal . . . period is not provided.” In the example above, the employee lost a quarter of their personal time during their meal period and should have received a full hour of premium wages for the 10 minutes lost during their meal period. The concern is that rounding does not always prompt premium pay for short, missed, or delayed meal periods. So, while rounding may efficiently calculate hours worked and wages owed to employees, it is not the case where meal periods are concerned.
In the same respect, an on-time meal period and an extended meal period does not compensate for any previous short, missed, or delayed meal periods. For example, if an employee clocks out for lunch at 11:58 a.m. and then clocks in from lunch at 12: 38 p.m., the extra 10-minutes the employee was paid for work while on their meal period on this day, does not excuse the 10-minues of their meal period the employee lost on a prior date, and was not paid at a premium wage as required by law. The California Supreme Court made it clear in their decision in Donohue v. AMN Services, LLC, – employers may not engage in rounding time punches to the nearest time increment during employee meal periods without paying the employee a premium wage for the time lost during a short, missed, or delayed meal period.
At the Summary Judgment Stage, Time-keeping Records Indicating Noncompliant Meal Periods Raise a Rebuttable Presumption of Meal Period Violations
The second issue decided in this case was the rebuttable presumption of meal period violations at the summary judgment stage when time records show noncompliant meal periods. In other words, missed, short, or delayed meal periods with no record of proper compensation are considered noncompliant meal periods. If time records prove missed, short, or delayed meal periods with no indication of premium wage compensation, then the employer has to disprove the rebuttable presumption of meal period violations, including at the summary judgement stage of a suit.
However, an employer is only liable if it does not provide an employee with the opportunity to take a full, uninterrupted 30-minute meal period. On the other hand, if time records show noncompliant meal periods, then a rebuttable presumption of liability arises for the employer, and it is presumed that the employee was not provided an uninterrupted meal period for a given shift over five hours. This presumption is assigned to the employer because the employer is responsible for maintaining accurate time-keeping records.
The rebuttable presumption of meal period violations does not require employers to police meal periods. Say for instance, an employee voluntarily waives their meal period to continue working, the employer cannot force the employee to take a meal period instead, but it does have to provide that employee with the mechanism for properly recording their meal periods. An employer can rebut the presumption of meal period violations by showing employees were paid premium wage for short, missed, or delayed meal periods. Employers can also rebut the presumption of meal period violations by showing employees voluntarily declined or delayed a meal period to continue working.
So, What Does All This Mean For the Average Employee?
The California Supreme Court’s primary concern here is proper payment to employees of premium wages for short, missed, or delayed meal periods when employers utilize a time-keeping mechanism that rounds the employee’s meal period times to the nearest time increment. The practice of rounding time where meal periods are concerned, raise questions of compliance with California labor and wage codes. Employers should err on the side of using time-keeping mechanisms that automatically round time for meal periods to the next time increment because such a practice does not capture the actual time the employee spent on their meal period. When time records show a short, missed or delayed meal period, the employer bears the burden to prove that it provided the employee with a full, uninterrupted 30-minute meal period, or otherwise compensated the employee at a premium wage for their short, missed or delayed meal period. In other words, comply with meal periods or pay the premium.
