California Employers Should Review Time-Keeping Practices for Meal Breaks

California employers are prohibited from rounding time-clock punches for employee meal periods, according to a recent ruling by the state's high court.  

Employees in the Golden State generally must receive a 30-minute unpaid meal break for every five hours they work. "The meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding is incompatible with that objective," wrote Justice Goodwin Liu for the California Supreme Court on Feb. 25.

Additionally, the court said, if time records show evidence of noncompliant meal periods, the court will assume a violation was committed unless the employer proves otherwise.

"The ruling is significant," said Mark Payne, an attorney with Troutman Pepper in Orange County, Calif. "It provides a clear direction that any kind of rounding practice related to recording meal periods is prohibited."

Strict Meal Break Rules

Employees in California must receive a 30-minute unpaid meal break for every five hours they work; they can waive their right to take a meal break only if they work no more than six hours. A second break must be provided after 10 hours but can be waived if the employee works no more than 12 hours and the first break was taken. In limited circumstances, an employee may be permitted to have an "on-duty" meal period, but the time must be paid at the worker's regular rate of pay.

Employees are entitled to one hour of pay for each day a meal period rule wasn't followed. So, if an employee doesn't receive a full meal break, the employer will need to pay the employee a one-hour premium.

"To avoid liability, an employer must provide its employees with full and timely meal periods whenever those meal periods are required," the California Supreme Court said, noting that "even a minor infringement of the meal period triggers the premium pay obligation."

The question in Donohue v. AMN Services, LLC was whether an employer could have a neutral practice that rounded employee time-clock punches to the nearest 10-minute increment. The employer's time-keeping system included a dropdown menu for employees to list whether their meal break was short, missed or delayed, but the system didn't show whether the time was rounded up to 30 minutes.

"The California Supreme Court declared that compliance with the 30-minute meal period requirement must be based on precise actual time with no rounding permitted," explained Mark Terman, an attorney with Faegre Drinker in Los Angeles.

The court also held that "records showing noncompliant meal periods raise a rebuttable presumption of meal period violations." This means that employers should be prepared to prove that they provided the full meal break.

While the court restated its existing view that employers need not police meal breaks, Terman said, it also said employers need to give employees a mechanism for recording their meal periods and ensure that employees are using that mechanism properly.

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Review Policies and Practices

Employers should be doing everything they can to ensure they can prove meal period compliance, Payne said. "It's not enough to have a policy that says the company provides meal periods before the fifth hour of work," he explained. "The employer has the obligation to keep accurate records."

Employers have to record the actual length of the meal breaks. If an employee's meal period was short, the employers should be able to show it was the employee's choice and not because of anything the employer did, he noted.

Allyson Thompson, an attorney with Kaufman Dolowich & Voluck in Los Angeles, said employees should be accurately recording their own time every day. "If a supervisor is recording meal breaks every day at exactly 12:00, it's a red flag." The actual time an employee clocks out for lunch may be 11:59 or 12:02. So a timesheet that reflects a 12:00 to 12:30 meal period each day may signal to a court that the time was rounded. 

Employers can have great policies and time-keeping software, Thompson said, but someone needs to ensure that employees are actually getting their full breaks. An employee in HR should be trained to look through time-keeping records to identify short breaks, she noted. Employees who received short breaks should be given the one hour of premium pay, and paystubs should clearly designate the payment as a meal break premium.

Although the court addressed only meal period rounding, employers may want to eliminate rounding practices altogether. "Rounding is still allowed for purposes of calculating wages," Payne said. "But the day may be coming when the court is less tolerant of rounding wage calculations, even when the practice is neutral and doesn't disadvantage employees." He noted that computerized time-keeping systems make it easier to precisely record time.

In AMN Services, the California Supreme Court noted that "technological advances may help employers to track time more precisely" and "employers are in a better position than employees to devise alternatives" to rounding time-clock punches.

Terman observed that rounding practices are already targeted in wage and hour class actions in California. "This ruling accelerates the risk of claims, such as missed meal period premiums, for employers who do not pay to the time-punch minute and provide at least a 30-minute, duty-free and uninterrupted meal period."

Said Thompson: "The golden rule is to pay for all hours worked."