What Are the Significant Wage and Hour Developments from 2022?
Rounding policies are unacceptable in companies that can capture exact time worked.
The California Court of Appeal (Camp v. Home Depot) ruled that employers who “can capture and [have] captured the exact amount of time an employee has worked during a shift” must fully compensate employees for all the time worked, rather than rounded time, even if their rounding practice is neutral on its face and as applied. The opinion does not define the circumstances in which an employer might argue that it is unable to capture time to the minute. Although rounding policies are not, by virtue of this decision, entirely prohibited, if your company is able to utilize a “to the minute” time-keeping system, you may not round. The Court of Appeal invited the California Supreme Court to weigh in on the issue and it is likely that the circumstances under which rounding is permissible will be further circumscribed (at best) or be held not to exist at all. We are watching to see if the decision will be appealed (likely).
What this means to California employers? Given the risks associated with rounding policies generally (you are at risk if you are not regularly auditing the impact of your rounding practice, and at risk if your rounding policy on balance benefits the company more than the employee), good sense suggests adopting a time-keeping system that tracks to the minute, and abandoning your rounding practices.
Employees are entitled to waiting time penalties for unpaid meal and rest period premiums.
The failure to provide timely, uninterrupted meal and rest periods in California just became even more expensive. As you know, California has strict requirements as to when and how non-exempt employees are entitled to meal and rest periods. And when employees are prevented from taking timely uninterrupted meal and rest periods, those employees are entitled to premiums as a result. Separately, when a California employer fails to pay an employee their full final wages in accordance with the timing requirements of the California Labor Code, the employee is entitled to a “waiting time penalty” of up to thirty calendar days of the employee’s wages. In a recent case (Naranjo v. Spectrum Security Services, Inc.), the California Supreme Court ruled that the meal and rest period premiums must be reported on employee’s wage statements, and that they must be paid as of the date the employer pays final wages. In the event these premiums are not paid as final wages, the employee is entitled to seek waiting time penalties. The court reasoned that the premiums are not just intended to provide compensation for the missed meal period or rest break, but also are compensation “for the work the employee performed during the break period.”
What all this means for your workplace? We are sure you have heard us say this before:
- Audit your pay policies and practices.
- Ensure your payroll system is setup to pay meal and rest premiums, and pay the premiums as warranted.
- Repeatedly share your meal and rest period policies and practices with employees.
- Require that employees confirm their awareness of these policies on a pay period basis, and attest that they were provided with these meal and rest periods or otherwise alerted management that these breaks were missed or untimely.
- Train your managers on the meal and rest period laws.
- And when you are done with the above, rinse and repeat.
- Let us know how we can help!