Written by Jeremy Mittman and Stephen Franz

On February 25, 2021, the California Supreme Court in Donohue v. AMN Services, LLC issued two holdings clarifying employers’ duties to provide 30-minute meal periods to employees: (1) employers cannot round employees’ time in the meal period context; and (2) employers’ time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations.

In Donohue, the employer used an electronic timekeeping system to track employees’ compensable time.  The system rounded workers’ time punches for meal periods to the nearest 10 minute increment.  For example, the system recorded a 23-minute lunch starting at 11:02 a.m. and ending at 11:25 a.m. as a 30 minute lunch starting at 11:00 a.m. and ending at 11:30 a.m.  In effect, the timekeeping system did not always reflect that employees’ meal breaks were less than 30 minutes (wherein the employees would be eligible under California law for one hour of premium pay if the employer did not provide them the opportunity to take a 30-minute meal period). 

No Rounding of Employee Time in Meal Period Context

The court first held that in the context of meal periods, employers cannot engage in the practice of rounding time punches — that is, adjusting the hours that an employee has actually worked to the nearest preset time increment.  As the court noted, the meal period provisions of the California Labor Code and Industrial Welfare Commission are designed to prevent even minor infringements on meal period requirements, If an employer does not provide employees with the opportunity to take a 30-minute meal period, the law entitles the employees to premium pay.  The court concluded the employer’s rounding system prevented employees who did not have the opportunity to take a 30-minute meal period from receiving the premium pay they were entitled to.  While the court did not directly disapprove of rounding outside of the meal period context, it noted that “[a]s technology continues to evolve, the practical advantages of rounding policies may diminish further.”

Rebuttable Presumption for Incomplete Meal Period Records—And a Possible Solution

The court further held that time records showing noncompliant (missed, late, or short) meal periods raise a rebuttable presumption of meal period violations.  If records do not reflect employees took compliant meal periods, the employer has the burden of presenting evidence that employees were either provided the opportunity to take a 30-minute meal period or were compensated with premium pay if they did not receive a compliant meal period.  Importantly, the court held employers could use a dropdown menu in timekeeping software that is triggered every time an employee does not enter a compliant meal period.  This dropdown can ask whether the employee merely chose to not take a compliant meal period (no entitlement to premium pay) or the compliant meal period was unavailable (entitled to premium pay). 

Takeaways for California Employers

The conclusions in Donohue should encourage California employers to use timekeeping systems that do not round any of the time employees spend taking meal periods.  While rounding with respect to wages (as long as the net rounding effect is neutral) remains lawful, the court’s ruling suggests that such policies may eventually become disfavored as technology continues to advance. 

Employers should continue to maintain timekeeping records that accurately reflect employees’ meal periods.  Employers should also consider using timekeeping applications that flag when employee meal periods are noncompliant, and consider offering dropdown menus where employees indicate whether or not they voluntarily chose not to take a compliant meal period, to ensure employees receive premium pay if they are entitled to it.  Employers should consult this decision, or their trusted employment counsel, for further guidance.