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Is time clock rounding legal in California?

Certain employment laws are different in California than they are in many different states. Both state statutes and court precedent in California expand on federal employment rules. Workers have additional rights in California that they do not have in other states. 

In general, time clock rounding is a common business practice. Employers pay workers in five, 10 or even 15-minute increments. Is time clock rounding legal in California?

Employers could be at risk of a lawsuit

One way in which California law deviates from federal pay standards is the so-called de minimus rule. Federal fair pay laws allow employers to forgo compensating workers for very small and irregular work functions. California, on the other hand, requires that workers receive pay for all time worked. 

If a company does not have accurate timekeeping software, then time clock rounding could be a way to streamline payroll accounting matters. However, most employers have digital time clock software and therefore know exactly how long workers are on the job. They should properly compensate the employees for their time based on when they clock in and out of each shift. 

Employee rights advocates were hopeful that a state Supreme Court ruling would create an official precedent on the matter, but the employer facing a California lawsuit over time clock rounding ended up agreeing to a multi-million dollar settlement with the workers who brought the lawsuit. In some cases, time clock rounding could lead to successful lawsuits depending on company practices. 

A review of how a company implements time clock rounding practices, including whether it is neutral when choosing whether to round up or round down, can give workers a better idea about whether they might have grounds for a wage claim. Understanding how California wage laws differ from federal rules may help workers more effectively advocate for themselves.


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