Neutral time-rounding is a commonplace and efficient timekeeping method used by countless employers throughout California and across the country. For decades, employers have used rounding to efficiently manage their payroll systems and to ensure that their employees are appropriately compensated for all work performed.

When applied neutrally – i.e., when time is rounded both up and down – time rounding reduces employers’ overhead costs while providing employees with flexibility when clocking in and out. Over the long run, the compensation for each employee will average out, leaving employees with the same total compensation that they would receive under a system that rigidly recorded their time down to the minute or second.

Camp v. Home Depot is a case pending in the California Supreme Court that will decide whether employers in California are permitted to use neutral time-rounding practices to calculate employees’ work time for payroll purposes.

The case began when Delmer Camp and Adriana Correa filed a putative class action lawsuit against Home Depot, alleging that the company’s quarter-hour rounding policy violated California law. Under Home Depot’s policy, employees’ work time was rounded up or down to the nearest quarter-hour, which resulted in some employees being paid for less time than they actually worked.

The trial court granted Home Depot summary judgment, finding that its rounding policy was lawful under California law. However, the California Court of Appeal reversed, holding that the rounding policy violated California law because it resulted in employees being underpaid.

Home Depot appealed the Court of Appeal’s decision to the Supreme Court, which granted a review in February 2023 (Docket Number S277518). The case is expected to be heard in the fall of 2023.

The U.S. Chamber of Commerce coalition just filed an anamicus brief this October, urging the California Supreme Court to hold that employers are permitted to use neutral time-rounding policies to calculate time worked.

The Chamber argues that the practice of neutral time-rounding is expressly authorized by federal law and endorsed by California’s Division of Labor Standards Enforcement (“DLSE”), had been uniformly affirmed by California courts since the seminal decision in See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889.

In See’s Candy, the court recognized that the Labor Code is silent as to the lawfulness of time rounding and thus looked to federal law for guidance, as have courts and administrative agencies in other states when interpreting similar provisions in those states’ labor codes.

Nonetheless the Court of Appeal in the Camp opinion clearly said it’s opinion applies “in the limited circumstance here, where the employer can capture and has captured all the minutes an employee has worked and then applies a quarter-hour rounding policy. In this regard, we also respectfully invite the California Supreme Court to review the issue of neutral time rounding by employers and to provide guidance on the propriety of time rounding by employers, especially in view of the “technological advances” that now exist which “help employers to track time more precisely.”

The case has generated significant interest from the business community, as it could have far-reaching implications for employers across the country. If the Supreme Court holds that employers in California are not permitted to use neutral time-rounding practices, it could lead to similar challenges to time-rounding policies in other states.