Home Depot uses a Kronos electronic timekeeping system. Employees use the system to punch in and out for work shifts. The system records the time down to the minute when an employee punches in or out. Home Depot then applies a quarter-hour rounding policy to the total shift time worked by an employee. For example, if an employee works 6 hours and 7 minutes, their time sheet would reflect that they worked a 6-hour shift. If an employee worked for 6 hours and 8 minutes, their time sheet would reflect that they worked a 6.25-hour shift.
Delmer Camp lost a total of 470 minutes of time worked over four and a half years of employment with Home Depot. He filed a lawsuit against Home Depot for unpaid wages.
Relying on previous case law, Home Depot filed a motion for summary judgment contending that its rounding system was neutral on its face, neutral as applied, and otherwise lawful under the controlling case law. The trial court granted Home Depot’s motion. Camp appealed.
The California Court of Appeal first reviewed the relevant wage orders and the Labor Code and found that both contemplate that employees must be paid for all work performed. The Court of Appeal also noted that both the wage orders and Labor Code are concerned with even small amounts of work time, such as small losses to individual employees that will occur when an employer uses a rounding system. Finally, the Court of Appeal found that, unlike the Fair Labor Standards Act (FLSA) regulations, there is no language, in the Labor Code or in the applicable wage order that authorizes time rounding if 1) the rounding causes the underpayment of an individual employee for all time worked, and 2) the employer can capture and has captured the employee’s worktime in minute increments.
The Court of Appeal next noted that there is no language in California law that authorizes time rounding that causes the underpayment of an individual employee for all time worked if there is no administrative difficulty in capturing all work time. Rounding work time only came into existence because pay systems could not track time more precisely. With technological advancements, it is now easy to capture working time exactly, as Home Depot did in this case. The Court of Appeal observed that rounding now seems to be an additional step instead of a shortcut to accurate payments.
Home Depot could not refute any of these contentions. The Court of Appeal overturned the grant of summary judgment and held that if an employer can and does accurately capture all time an employee works, the employee must be paid for all hours worked and cannot lose time, even because of a neutral and neutrally applied rounding policy.
Camp v. Home Depot U.S.A., Inc., 84 Cal. App. 5th 638 (2022).
Note:
This case highlights how California’s more employee-friendly wage laws interact with the federal FLSA. The FLSA establishes a baseline standard, but individual states like California can create greater employee rights. Note also that while California’s minimum wage law applies to public agency employers, California’s daily overtime standards do not.