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Hospital’s Quarter Hour Time-Rounding Policy Was Lawful
Joana David worked as a registered nurse at the Queen of the Valley Medical Center (QVMC) from 2005 to 2015. From September 2011 to May 2015, David worked two, 12-hour shifts per week. To record her time, David clocked in and out of work using an electronic timekeeping system that automatically rounded time entries up or down to the nearest quarter-hour.
After David’s employment ended, she sued QVMC alleging various California wage and hour violations. Among other claims, David alleged that QVMC did not pay her all wages owed because of the hospital’s time-rounding policy.
QVMC argued that it paid David for all time worked and that its rounding policy was legal. Specifically, QVMC noted that because David’s time entries were rounded to the nearest quarter hour, when she clocked in or out, her time was rounded up or down a maximum of seven minutes. Thus, David benefitted from the rounding policy on several occasions. QVMC’s expert witness reviewed David’s time entries and concluded that in a 128-day period, 47% of David’s rounded time entries favored her or had no impact and 53% favored QVMC. Further, the expert found that during that same period, the hospital paid David for 2,995.75 hours of work, and that had punch time entries been used, QVMC would have paid David for 3,003.5 hours. While David argued that the hospital’s failure to pay her for those 7.75 hours of work established that the rounding policy was unfair, the court found that QVMC had shown its policy was neutral. After the trial court decided in favor of QVMC, David appealed.
Under California wage and hour law, an employer may use a rounding policy if it is “fair and neutral on its face” and “is used in in such a manner that will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” Further, a court may decide in favor of an employer if the employer can show the rounding policy does not systematically underpay the employee, even if the employee loses some compensation over time.
On appeal, the Court of Appeal affirmed the trial court’s decision and found that QVMC’s policy was neutral both on its face and in practice. The Court noted that the timekeeping software rounded all time, regardless of whether the rounding benefited QVMC or the employee. Further, the court reasoned that the policy did not systematically undercompensate David since the overall loss of 7.75 hours in the 128-day period was statistically meaningless. Thus, the court found that QVMC had satisfied its burden of establishing that the rounding policy was lawful.
David v. Queen of Valley Med. Ctr., 51 CalApp.5th 653, 264 Cal.Rptr.3d 279 (2020).
This case examines time-rounding policies under California law. While the federal wage and hour law generally governs public agencies, this decision offers guidance similar to that under the federal law regarding time-rounding policies.