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California Meal Break Update: Punch Rounding No Longer Compliant!

April 1, 2021 - minute read

For hourly workforce employers, prioritizing both federal and inconsistent state laws has always been a significant challenge. For the state of California, such complications just reached new heights with a recent court case concerning time collection: Kennedy Donohue v. AMN Services, LLC.

The California Supreme Court’s decision on February 25 has essentially ended the usage of time-punch rounding policies in the context of employee meal periods for the state. If you manage an hourly workforce in California, this outcome will likely require you to alter how you track and round employee time punches for meal periods throughout the workday.

Before we discuss what your next step should be, let’s clarify the case and the key takeaways from this monumental court decision.

California Meal Break Laws Before Donohue v. AMN Services, LLC

Due to a number of California laws, employers with large hourly, distributed workforces (which often need to take simultaneous meal periods for efficiency’s sake) already have a lot of complications complying with California’s wage and hour requirements, and that’s with the assistance of rounding time punches.

These meal break compliance requirements include:

  • Giving non-exempt employees 30-min. meal period that begins no later than the end of the fifth hour or work and another that begins no later than the end of the tenth hour;
  • Paying employees a “meal period premium”, or one additional hour of pay at the employee’s regular rate of compensation for each workday that a meal period violation (late meal period, is interrupted by work during a meal period, or misses a meal period) occurs; and
  • Ensuring employees do not wave their second meal break if they decide to compliantly wave the first.

These requirements have likely led you, as it has with many other employers, to depend on programming time keeping software to “round” minutes and safeguard against legal complications. After all, without the assistance of rounding, it is nearly impossible to get all your employees’ meal periods punched in and started exactly on the correct hour markers.

Donohue v. AMN Services, LLC

With the Court’s decision in Donohue v. AMN Services, LLC, however, your ability to use meal break time rounding just changed. Kennedy Donohue filed a class action lawsuit against AMN, arguing the company denied its employees compliant meal periods because it improperly rounded time records within its timekeeping system… and won.

With the conclusion of the case, the California Supreme Court decided two major issues of law relevant to meal periods, which are as follows:

  • Firstly, employers cannot round time punches in the context of meal periods, i.e., adjusting the hours that an employee has actually worked to the nearest preset time increment. The Court’s reasoning was that, although there are certain time rounding scenarios that are permissible, the practice of rounding meal periods is incompatible with sections of Labor Code intended to safeguard the employees’ health, safety, and well-being.
  • Secondly, time records depicting noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage of litigation. That means that if your records show late, interrupted, or missed meal periods without paying your employee the legally required premium, it will be presumed that you didn’t provide a legally compliant meal period and broke the law.

Next Steps for Employers

As a practical matter, there are some things you will need to do to safeguard your business from litigation now that meal period rounding is no longer an option. Here are some suggestions for adapting your existing operational procedures:

  • Ensure all of your California-based employees receive at least 30 minutes of uninterrupted, off-duty meal break time without exception, otherwise you will either have to pay the premium or deal with a full legal process in court.
  • Review your time keeping practices to determine if your time and attendance policies or system round employee time punches for meal periods. If so, promptly seek certified legal counsel to assist with bringing your policies and procedures into compliance.
  • Re-orient work schedules to provide for 35+ minute unpaid meal breaks. This will not cost your business additional funds because the meal period is unpaid. Plus, it would allow additional time for employees to clock in and out, significantly reducing the number of meal period premiums needed for late, interrupted, or missed punches.

Customized Rounding with Award-Winning Time and Attendance

EPAY’s flexible time and attendance system provides safeguards to ensure meal break compliance and reduce your risk of wage and hour lawsuits. With our customizable time collection software, you can rest easy knowing your workforce management will be able to adapt with each unique state law or federal-level change that comes your way.

Interested in learning how else EPAY protect you against litigation while cutting your labor costs by 5% or more? Request a personalized demo today!

Filed Under: Compliance Time Tracking California