CALIFORNIA SUPREME COURT STRIKES BLOW TO MEAL PERIOD ROUNDING AND NON-COMPLIANCE

Posted: February 26, 2021 |

The California Supreme Court has altered the landscape of many wage and hour lawsuits with its February 25, 2021 unanimous decision in Donohue v. AMN Services, LLC. The Donohue decision has, for the first time, created a rule that explicitly prohibits employers from rounding meal periods. 

The decision has also fundamentally altered the burden of proof in meal period violation litigation. The Supreme Court held in Donohue that a meal period of less than 30 minutes or taken after five hours of work creates a presumption that the meal period is non-compliant. The Court held that employers must either provide an hour of premium pay for such non-compliant meal periods or provide evidence that the employee chose to voluntarily waive a compliant meal period.

The employer in the Donohue case implemented a policy that rounded meal periods to the nearest 10-minute increment. This meant that any time punch from 12:05 to 12:14 would be rounded to 12:10. As explained by the Supreme Court, the policy resulted in the AMN Services, LLC employees receiving 85 hours of pay in excess of what the employees would have received if the meal periods had not been rounded. This was true because more of the meal periods rounded to the employee’s favor, by rounding meal periods of 38 minutes down to 30 minutes or 47 minutes down to 40 minutes. 

However, the Supreme Court cited Industrial Welfare Commission Wage Order No. 4 which provides, “No employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes...Unless the employee is relieved of all duty during a 30 minute meal period, the meal period shall be considered an ‘on duty’ meal period and counted as time worked.”

The Court reasoned that “[t]he practice of rounding time punches for meal periods is inconsistent with the purpose of the Labor Code provisions and the IWC wage order. The text of Labor Code section 512 and Wage Order No. 4 sets precise time requirements for meal periods. Each meal period must be ‘not less than 30 minutes,’ and no employee shall work ‘more than five hours per day’ or ‘more than 10 hours per day’ without being provided with a meal period.”

The Court found that given the precise time requirements set forth both in the Labor Code and the Wage Orders that rounding meal periods of less than 30 minutes to a compliant 30-minute meal period is not legally permissible. Thus, any meal period of 29 minutes or less is not compliant. The Court further stated that, “[a] premium pay scheme that discourages employers from infringing on meal periods by even a few minutes cannot be reconciled with a policy that counts those minutes as negligible rounding errors.”

The Donohue Court then turned to how such short meal periods are to be viewed during litigation. The Supreme Court acknowledged its previous guidance in 2012 in Brinker Restaurant Corp. v. Superior Court that “[T]he employer is not obligated to police meal breaks and ensure no work thereafter is performed.”

However, the Court explained that in those instances where an employee’s time records reflect either no meal period, a late meal period, or a short meal period for shifts in excess of five hours, a rebuttable presumption arises that the employee was not properly relieved of duty and no appropriate meal period was provided. The Court explained that because an employer has a duty to maintain accurate records of the timing of an employee’s meal period, the burden must shift to an employer to rebut the argument that an employee was not provided a compliant meal break. The Court explained that accurate records should be kept by the employer to determine whether an employee chose to waive, shorten or delay their meal break.

This creates an additional obligation for employers to investigate and document every time record that reflects a non-compliant meal break. For any employee that takes a meal break after five hours or less than 30 minutes, the employer should promptly investigate and document whether the employee chose to take the non-compliant meal break. The failure to do so promptly will mean that any later litigation over this issue creates a presumption that the meal break was non-compliant and that the employee should have been provided an additional hour of premium pay for the non-compliant meal period.

Employers should immediately eliminate any policies that round meal periods. This includes any policies that round the time from the start of the shift until the meal period to determine if it is in excess of five hours, and any policies rounding the length of the meal period. 

In addition, employers should set in place practices that review, analyze, and document any meal periods that are skipped, taken after five hours of work, or that are less than 30 minutes. In those instances, employers should have written documentation with the employee regarding whether the meal period was voluntarily skipped, delayed, or shortened. If the employee did not voluntarily skip, delay, or shorten the meal period, employers must provide the employee with a meal period premium equal to one hour of pay for that day. 

Further, to the extent that employers have not been actively documenting skipped, delayed, or shortened meal periods, it is recommended that the employer speak with a competent employment attorney to determine whether there are methods to implement documentation after the fact, or identify an opportunity to review and pay past meal period premiums that may now be presumed invalid. It is often simpler and cheaper to resolve these issues before an attorney representing employees files suit.

If you have any questions or concerns regarding rounding practices or meal period compliance, the attorneys at Ferruzzo & Ferruzzo, LLP are available to provide guidance.

This blog is not meant to provide specific legal advice. For advice specific to your business, please contact any of the employment attorneys in our Employment Practices Group who are ready to assist you.

James F. Rumm

James F. Rumm, Esq. is a Senior Associate and member of Ferruzzo & Ferruzzo, LLP’s Employment Practices Group.  James focuses on employment litigation, wage and hour class action defense, defense of discrimination, harassment and retaliation claims, complex business litigation, and trial work. James has trial experience in a wide range of areas including business litigation matters, employment litigation, personal injury and product liability matters. James has also argued on several occasions before both the California Court of Appeal and the Ninth Circuit Court of Appeals.