Home Depot's policy of rounding employees' working time to the nearest quarter of an hour does not violate California's wage and hour laws, a court has ruled.
Employee John Utne brought a class-action suit against the home improvement chain, arguing that its timekeeping system prevented him and other employees from being paid for all the time they had worked. The system records the time staff punch in and out at the beginning and end of their shift and rounds it to the nearest quarter of an hour. Utne said this practice caused him to lose out on pay, according to SHRM.
But Home Depot responded that the practice had a neutral effect and that rounding resulted in employees being overpaid just as often as they were underpaid. The company presented testimony from experts that indicated 57% of the shifts analysed were either overpaid or unaffected by the rounding practice, leaving only 43% of shifts underpaid. As a result, the average worker was paid an additional 11.3 minutes per pay period.
The district court agreed with Home Depot’s arguments and held that as long as the rounding policy averaged out and was neutral, it did not violate California wage and hour law.
The court also made it clear that policies that only round down and therefore result in systematic under-compensation, violate the law. It likewise noted the California Court of Appeal had previously ruled that the federal rounding rule also applied to California state wage claims.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
Home Depot's policy of rounding employees' working time to the nearest quarter of an hour does not violate California's wage and hour laws, a court has ruled.
Employee John Utne brought a class-action suit against the home improvement chain, arguing that its timekeeping system prevented him and other employees from being paid for all the time they had worked. The system records the time staff punch in and out at the beginning and end of their shift and rounds it to the nearest quarter of an hour. Utne said this practice caused him to lose out on pay, according to SHRM.
But Home Depot responded that the practice had a neutral effect and that rounding resulted in employees being overpaid just as often as they were underpaid. The company presented testimony from experts that indicated 57% of the shifts analysed were either overpaid or unaffected by the rounding practice, leaving only 43% of shifts underpaid. As a result, the average worker was paid an additional 11.3 minutes per pay period.
The district court agreed with Home Depot’s arguments and held that as long as the rounding policy averaged out and was neutral, it did not violate California wage and hour law.
The court also made it clear that policies that only round down and therefore result in systematic under-compensation, violate the law. It likewise noted the California Court of Appeal had previously ruled that the federal rounding rule also applied to California state wage claims.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
