Wage and Hour Case Notes
| Citation | Vol. 32 No. 5 |
| Publication year | 2018 |
| Author | By Lois M. Kosch |
By Lois M. Kosch
Lois M. Kosch is a partner at Wilson Turner Kosmo. She specializes in counseling and representing employers in all aspects of employment law and litigation. Ms. Kosch is a former member of the Labor and Employment Law Section's Executive Committee.
AHMC Healthcare, Inc. v. Superior Court, 24 Cal. App. 5th 1014 (2018)
Former employees of a healthcare company filed a putative class action alleging the employer's use of a payroll system that automatically rounds employee time up or down to the nearest quarter hour violates California law. Both parties moved for summary adjudication on the issue and the trial court denied both motions. The employer sought a writ of mandate directing the trial court to grant its motion, contending it had established its system was neutral on its face and as applied. The appellate court agreed and granted the writ.
Under the employer's policy, employees who clocked in between 6:53 and 7:07 were paid as if they clocked in at 7:00; employees clocking in between 7:23 and 7:37 were paid as though they clocked in at 7:30. Four years of data was analyzed to determine whether employees as a whole benefited from having minutes added to their time or lost by having minutes deducted. A majority of employee shifts had time added or were unaffected. One of the two named plaintiffs lost 3.7 hours over the four years examined; the other lost 1.6 hours over the course of her nine months of employment.
Based on this analysis, the employer argued the rounding policy was lawful, as it was facially neutral, applied fairly, and provided a net benefit to employees considered as a whole. Plaintiffs contended the practice was unlawful if it systematically undercompensated employees, and that such systemic undercompensation occurs whenever "the average employee suffers a loss of income due to rounding." Plaintiffs further contended that a rounding policy that results in any loss to any employee, no matter how minimal, violates California law.
The appellate court noted that rounding has been permissible for decades under 29 C.F.R. § 785.48, and California's wage laws are patterned on federal statutes and case authority. Drawing from past cases, the court here found the employer's rounding system to be neutral on its face and, in practice, did not systematically undercompensate employees over time. Although a bare majority of employees at one location lost minor sums, this did not create an issue of fact as to the validity of the system. The court noted that there is no requirement that every employee gain or break even over every pay period or set of pay...
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