© 2021 American Payroll Institute, Inc. California Supreme Court Says Time Punches For Meal Breaks Cannot Be Rounded Tbe he California Supreme Court ruled time punches cannot rounded (i.e., adjusted to the nearest preset time increment) in the meal period context. According to the court’s ruling, the meal period provisions in California law are designed to prevent even minor infringements of meal period requirements, and rounding is incompatible with that objective [Donohue v. AMN Services, LLC, No. S253677 (Calif., 2-25-21)]. WHAT THE LAW SAYS Under California law, employers generally must provide employees with one 30-minute meal period that begins no later than the end of the fifth hour of work and another 30-minute meal period that begins no later than the end of the tenth hour of work [Cal. Lab. Code, §512(a) Industrial Welfare Commission (IWC) Wage Order No. 4-2001, §11(A)]. If an employer does not provide an employee with a compliant 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” [Cal. Lab. Code, §226.7(c) IWC Wage Order No. 4-2001, §11(B)]. Background A class of nonexempt nurse recruiters brought meal period violation claims against AMN Services, LLC (AMN), a health care services and staffing company that recruits nurses for temporary contract assignments. The nonexempt nurse recruiters generally worked eight-hour days. AMN company policy directed supervisors to provide nurse recruiters with 30-minute meal periods beginning no later than the end of the fifth hour of work. Company policy and training materials consistent with state law requirements emphasized the meal period should be an uninterrupted 30-minute break during which the employee should be relieved of all job duties, be free to leave the office site, and be allowed to control his or her own time (i.e., as opposed to employer-controlled time). The policy also directed supervisors not to impede or discourage team members from taking the break. In spite of the compliant policy, nurse recruiters provided testimony that company culture actively discouraged employees from taking full and timely lunches. Timekeeping system rounding issues AMN used an electronic timekeeping system to track employees’ compensable time. Employees could punch in and out from their desktop computers, including at the start and end of the work shift and the start and end of meal breaks. For purposes of calculating work time and compensation, the timekeeping system rounded the time punches to the nearest 10-minute increment. For example, if an employee clocked out for lunch at 1:02 p.m. and clocked in after lunch at 1:25 p.m. (23 minutes), the system recorded the time punches as 1:00 p.m. and 1:30 p.m. (30 minutes). Programming flaw AMN used the timekeeping system to manage potentially noncompliant meal periods. When the system showed a missed meal period, a meal period shorter than 30 minutes, or a meal period taken after five hours of work, the employee was automatically paid a premium wage prior to the 2012 California Supreme Court decision in Brinker Restaurant Corp. v. Superior Court (Brinker). After the Brinker decision, a noncompliant meal break triggered a dropdown menu requiring the employee to indicate whether he or she had been given the opportunity to take a compliant meal break but had voluntarily foregone the opportunity. If the opportunity had not been provided, the employee would be paid the premium wage. For the management of potentially noncompliant meal periods, the system relied on rounded time punches rather than actual time punches. In the previous example with lunch beginning at 1:02 p.m. and ending at 1:25 p.m. the system would have considered the lunch to be a compliant meal period. Prior to the Brinker decision, the premium wage would not have been paid automatically, and after the decision the prompt allowing the employee to indicate the meal period violation would not have been triggered, so the premium wage would not have been paid. Although the programming flaw applied only to a specific type of violation, a statistics professor acting as an expert witness calculated that it resulted in the denial of premium wages for 40,110 short lunches and 6,651 delayed lunches during the period of time covered by the lawsuit, totaling $802,077.08. Outcome The California Supreme Court opinion directed courts to presume meal period violations if time records show noncompliant meal periods (i.e., a rebuttable presumption of noncompliance). It also reversed the intermediate appellate court’s judgment and sent the case back to the trial court for further proceedings consistent with its determination. March 22, 2021 Volume 23 Issue 6
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