On February 25, 2021, the California Supreme Court issued its opinion in Donohue v. AMN Services, LLC, holding that (1) employers cannot round time punches in the meal period context, and (2) time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations at the summary judgment stage.
AMN used an electronic timekeeping system which recorded employees’ time in 10-minute increments and then rounded this time to the nearest hundredth. For instance, if an employee clocked out for lunch at 11:02 a.m. and clocked in after lunch at 11:25 a.m., the timekeeping system would record the time punches as 11:00 a.m. and 11:30 a.m. In other words, the timekeeping system would record the meal period as 30 minutes, even though the actual meal period was only 23 minutes.
AMN had a policy indicating that employees were to take their meal and rest breaks as mandated under California law. If the employee did not record a compliant meal period, the timekeeping system provided a drop-down question where employees could choose a reason for the noncompliant meal period. No penalty was paid if the employees indicated they voluntarily chose not to take a 30-minute meal period.
Kennedy Donohue, who worked as a nurse recruiter at AMN, filed a class action against AMN Services in 2014, alleging various wage and hour violations. Specifically, Donohue alleged that employees were prevented from taking their full lunch breaks, and claimed that the rounding policy resulted in employees being denied premium pay for breaks that were cut short.
The trial court certified five classes of nonexempt employees. Both parties filed cross-motions for summary adjudication. The trial court granted AMN’s motion for summary adjudication and found that there was no evidence of a uniform policy or practice to deny meal periods and that the rounding policy fairly compensated employees.
The Court of Appeal affirmed the judgment in AMN’s favor, holding that the standard in prior California court decisions about rounding also applied to meal periods. In addition, the court rejected Donohue’s argument that time records showing missing, short or delayed meal periods give rise to a rebuttable presumption of meal period violations. According to the Court of Appeal, the rebuttable presumption applies only at the class certification stage, not at the summary judgment stage.
The California Supreme Court granted review to address two questions of law: whether an employer may properly round time punches for meal periods, and whether time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations.
First, the California Supreme Court found that rounding should not be applied to meal breaks. Given that California labor and wage laws have “precise time requirements” and that meal period provisions are designed to prevent even minor infringements, rounding is inconsistent with the purpose of the law. The rounding policy is not neutral, as “[i]t never provides employees with premium pay when such pay is not owed, but it does not always trigger premium pay when such pay is owed.”
Moreover, the Court held that noncompliant meal periods raise a rebuttable presumption of meal period violations at the summary judgment stage in proceedings. The California Supreme Court rejected AMN’s argument that the presumption would result in “automatic liability” for employers since the records could “reveal that there are no triable issues of material fact.” The Court noted that to rebut the presumption, AMN would need to provide evidence that employees voluntarily chose to work during off-duty meal periods that appear in time records to be short or delayed based on unrounded time punches.
In light of this, the California Supreme Court reversed the Court of Appeal’s judgment and remanded the case to the trial court.
Why it matters
The California Supreme Court ruled that employees must be allowed to take 30-minute meal breaks and that employers cannot round meal break times. Thus, employers that use rounding policies for meal periods will be required to change their timekeeping practices. Finally, employers should ensure that employees are provided compliant meal periods and should consult with counsel about the best way to handle situations in which the records show noncompliant meal periods.