Is time clock rounding a legal practice in California?

On Behalf of | Mar 5, 2024 | Firm News |

Paying workers an agreed-upon wage is perhaps the most basic responsibility of modern employers. Workers have a right to receive fair wages in accordance with their employment agreements and applicable laws. Both federal laws and California state statutes help protect employees from abuses by employers.

California actually has more robust wage and hour protections than much of the rest of the country. State law expands on overtime protections in several ways, for example. There are also key differences between California pay rules and federal fair pay standards. Those differences rely both on statutes implemented by lawmakers and precedents created during court cases. Some companies employ practices when dealing with California workers that might be legal elsewhere but technically violate state standards.

Is time clock rounding a lawful practice for businesses operating in California?

Courts have ruled on rounding practices

There was a time not that long ago when time clock rounding was a reasonable business decision. Having a single location to clock in or clock out can be an operational choke point that could very much slow down the beginning of shifts and lead to worker frustration when they are on their way out for the day.

Companies may have implemented a policy where they track a worker’s time not to the exact moment that they begin or end of the shift but rather to a specific increment of time. Companies often pay workers in five, 10 or even 15-minute increments. They might then engage in time clock rounding to pay workers.

The company rounds up or down the total number of minutes worked to the next appropriate increment. Time clock rounding lends itself to abuse, as employers may intentionally round down more often than they round up with calculating payroll. Even when companies are fair and neutral about rounding, the California courts have ruled that such practices likely violate state law.

The accessibility of highly-accurate timekeeping software systems makes time clock rounding unnecessary. It is a practice that may deny workers the pay that they deserve and could therefore justify litigation brought by frustrated employees. As such, pursuing a wage claim when a company violates California employment laws can potentially lead to both compensation for affected workers and changes to company practices.


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