Camp v. Home Depot U.S.A. Inc. (“Camp”) held that an employer must pay an employee for “all time worked,” if an employer can and has captured the exact amount of time an employee worked in a shift. Plaintiff Camp brought a claim for unpaid wages due to Home Depot’s quarter-hour time rounding policy, therefore Camp was not paid for all the time he worked according to Home Depot’s own timekeeping records. i Home Depot’s calculation via its electronic timekeeping system, “Kronos,” provided, “when total shift time falls between the quarter hour increment of seven minutes or less is rounded down to the nearest quarter hour, while a time increment of eight minutes or more is rounded up to the next quarter hour.” ii Thus, the court precluded summary judgment and held there was a genuine issue of material fact on whether an employee was paid for all the time worked.
The Court’s Analysis
The Camp Court analyzed the following three cases:
In See’s Candy Shops, Inc. v. Superior Court, the court reasoned that although federal law permitted ‘rounding’ of employee’s hours in the past, the arrangement averaged out so employees were fully compensated for the time they worked.iii The court in See’s Candy ultimately upheld that an employer is entitled to use the “nearest-tenth” rounding policy if the policy is fair and neutral on its face, and would not result in a manner that will not result in a failure to compensate employees properly for the time actually worked over time.iv
Troester v. Starbucks Corp concluded that employers cannot require employees to routinely work minutes off the clock without compensation by invoking the de minimis doctrine.v The California Supreme Court held that the federal de minimis rule, excusing wage payments for small amounts of compensable time upon a showing that the time is administratively difficult to record, does not apply to California wage and hour claims. The court further held that employers can devise alternatives that would permit tracking of small amounts during work hours, and possibly reasonably estimate worktime.vi
In Donohue v. AMN Services, LLC the California Supreme Court held that rounding was improper in the meal period context because adjusting and “[s]mall rounding errors can amount to a significant infringement on an employee’s right to a 30-minute meal period.”vii The Court reasoned this goes to the very idea that an employer must provide an additional hour of pay if such violation occurs (“premium pay”) as meal period provisions are designed to prevent even minor infringements.viii
In Camp, Home Depot captured the exact number of minutes that Plaintiff Camp worked for every shift. However due to the quarter-hour rounding policy, he was not paid for all the minutes accounted as a nonexempt employee.ix In total, Camp lost more than seven hours of work time due to the quarter-hour rounding policy. The court rejected Home Depot’s arguments that (1) rounding makes it easier for calculation of wages and (2) punch times do not accurately reflect an employee’s work time as an employee may take a personal call or talk with a coworker, therefore not constituting compensable time.x
The California Supreme Court has stated that the Labor Code and the relevant wage order “contemplate[] that employees will be paid for all work performed. xi The Court indicated that even the smallest amounts of worktimes are compensable when regularly occurring. xii Although federal regulation authorizes rounding only to average out “employees” as a whole, and not necessarily the individual employee, there is no evidence of the Industrial Wage Commission’s intent to adopt the federal standard.xiii Therefore, the court may decline to import the federal regulation. Lastly, no efficiencies were gained by Home Depot in rounding time. Technological advances are available to help employers track time more precisely.
Takeaways for Employers
Regardless of the small discrepancies of time in regards to rounding, an employer must provide pay to an employee for all of the time worked if the employer can and has captured the exact amount of time an employee worked within a given shift. Although rounding is permitted via federal regulation, California protects employees against discrepancies within the rounding procedures and provides employees with greater protection. If the time is recorded and accounted for, an employer may still use “nearest-tenth” rounding policies that is fair and neutral on its face, and does not result in a failure, to properly compensate employees for the time worked over time.
For guidance, please reach out to the attorney at Palmer Kazanjian Wohl Hodson, LLP.
i Camp v. Home Depot U.S.A. Inc., 84 Cal. App. 5th 638 (Cal. Ct. App. 2022).
ii Id.
iii See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th. 889 (Cal. Ct. App. 2012); Camp, supra note 1.
iv Id.
v Troester v. Starbucks Corp, 5 Cal. 5th 829 (2018); Camp, supra note 1.
vi Id.
vii Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (Cal. 2021); Camp, supra note 1.
viii Id.
ix Camp, supra note 1.
x Id.
xi Id.
xii Id.
xiii Id.