SAN FRANCISCO (Legal Newsline) - A man who claimed he was cheated out of 470 minutes of wages over more than five years at Home Depot can proceed with a proposed class action against the company, a California appeals court ruled, even as it dismissed claims by another employee because she was actually overpaid under the same method of averaging time worked into 15-minute increments.
In a decision calling for more clarity on timekeeping law from the California Supreme Court, the Sixth Appellate District said recent court decisions suggested state labor laws hold employers to a stricter standard than the federal government’s de minimus rule allowing deviations of up to 10 minutes a day.
Delmer Camp and Adriana Correa sued Home Depot USA over the company’s timekeeping system, claiming they and others weren’t compensated for all the hours they worked. Home Depot used a Kronos system that rounded up or down to the nearest 15-minute increment.
A sample of pay records for more than 13,000 employees who worked 4.3 million shifts found they were actually paid for 339,331 more minutes, or 5,656 hours, than if Home Depot did not round time. Correa dropped her claims when it turned out she was among the roughly 57% of employees who actually gained wages under the system.
Camp, however, lost roughly 7.8 hours due to rounding over 1,240 shifts between March 2015 and October 2020.
A trial court dismissed both claims, citing See’s Candy Shops, a 2012 decision by the Fourth District Court of Appeal that upheld neutral time-rounding systems that comply with federal labor rules.
Other California appeals courts have upheld rounding since. But then in 2018 with Troester v. Starbucks, the California Supreme Court said the federal standard of disregarding de minimus differences of 10 minutes a day or less might not always be valid in California, which requires employees to be paid “for all hours worked.” Employers are in a better position than employees to keep track of precise time worked, the state Supreme Court ruled, and technological advances since the de minimus rule was established more than 70 years ago made it less relevant. The court later outlawed time rounding for meal periods.
Home Depot argued even the most accurate time clock doesn’t capture all the minutes an employee works since they can take phone calls or chat with a coworker while punched in. Rounding is a statistically neutral way to smooth out those and other uncertainties, the company said.
The Sixth District appeals court, while acknowledging the California Supreme Court hasn’t explicitly outlawed time-rounding, said Camp had presented enough evidence for a jury to decide whether he had been underpaid for time worked.
“If an employer, as in this case, can capture and has captured the exact amount of time an employee has worked during a shift, the employer must pay the employee for `all the time’ worked,” the court ruled, citing California labor law. “We also respectfully invite the California Supreme Court to review the issue of neutral time rounding by employers and to provide guidance on the propriety of time rounding by employers, especially in view of the `technological advances’ that now exist which `help employers to track time more precisely.’”
Wage-and-hour lawsuits have become a lucrative expansion market for class-action attorneys, who frequently sue to recover minutes of time they claim hundreds or thousands of workers have lost over years of employment. The California Supreme Court recently cleared the way for lawyers to earn $280,000 for negotiating a $15,000 settlement between a woman and her employer over failing to provide 10-minute rest breaks.