As an employee in California, you might have wondered how your employer calculates your work hours based on California time rounding rules. It is easy to feel like you're missing something, especially if the numbers don't add up as you'd expect. Many workers might think, "Does my employer use a time clock rounding system?".

Maybe you've also considered, "Is time clock rounding even legal?" or "Does this impact what I'm getting paid each week?". Employees may hesitate to share these concerns openly, as they directly impact their pay.

We understand; it's tricky. But understanding California time rounding rules is pretty critical.

Table of Contents:

• What Federal Law Says About Time Clock Rounding
  • The 1-7, 8-14 Rule
  • Larger Increments Can be Risky
• Why Time Rounding Can Be an Issue
  • Minimum Wage Impacts
  • Overtime Pay Calculations
• California's Stance on Time Clock Rounding Rules
• Is Time Clock Rounding Still Legal Under California Time Rounding Rules?
  • What About Rounding Breaks?
• The 2023 California Rounding Rules: A Big Change
  • What Should Employers in California Do?
  • The Benefits of Using an Accurate Time-Tracking System
  • Benefits
  • Challenges Addressed
  • Keep an Eye on California's Labor Law Future
• Conclusion

What Federal Law Says About Time Clock Rounding

The Fair Labor Standards Act (FLSA) is a federal law and gives some insights into time clock rounding. It suggests that employers can round employee clock-in and clock-out times.

It is usually to the nearest five or ten minutes, or even to the quarter hour. This means if you clock in at 8:07 AM, your employer might round it down to 8:00 AM, but if you clock in at 8:08 AM, they should round it up to 8:15 AM.

The 1-7, 8-14 Rule

There's also what's called the "1-7, 8-14 Rule." If your time falls between 1-7 minutes, it can be rounded down.

If it falls between 8-14 minutes, it has to be rounded up. This counts as a quarter-hour of work. The idea is to not take away from employees time worked.

Larger Increments Can be Risky

Some employers might try rounding to bigger blocks of time, such as the nearest half-hour.

This isn't really recommended. It has the potential to create big issues. Employers could be breaking the law, as you might suspect.

Why Time Rounding Can Be an Issue

Time rounding isn't just about simplifying payroll—it carries significant legal implications for both employees and employers, often overlooked at first. If rounding consistently favors the employer by reducing recorded work hours, employees may be underpaid. While the differences may seem minor, they can add up significantly over time, leading to substantial wage losses.

Minimum Wage Impacts

Rounding down time can create minimum wage violations, potentially causing an employee's pay to fall below the legal requirement. If employers consistently round down, wages may dip below the mandated minimum, leading to serious legal consequences.

Overtime Pay Calculations

Time rounding can create significant issues with overtime pay. When hours are rounded down, it can impact whether an employee qualifies for overtime. An employer may round down hours that should have counted as overtime, potentially causing an employee to miss out on the extra pay they rightfully earned.

California's Stance on Time Clock Rounding Rules

California initially followed FLSA guidelines, using the same time rounding rules as many other states. However, in 2012, the California Supreme Court addressed the issue in See's Candy Shops, Inc. v. Superior Court, ruling that time rounding was permissible if it was 'fair and neutral,' ensuring employees were fully compensated for their actual work. Since then, California's time rounding rules have evolved as labor laws and workplace standards have changed.

Is Time Clock Rounding Still Legal Under California Time Rounding Rules?

It's a bit complicated but yes, it can still be. Recent court rulings have tightened the rules.

Think about the case of Troester v. Starbucks Corp. Here, an employee sued over unpaid time for tasks after clocking out.

Initially, the court agreed with Starbucks using the federal ‘de minimis' rule, which allows small amounts of time to be skipped. But the California Supreme Court stated all minutes worked need to be paid for and eventually they overturned this.

What About Rounding Breaks?

Absolutely not. In the 2021 case Donohue v. AMN Services, LLC, the court ruled that rounding meal break times is not allowed. If an employee takes less than the required 30-minute lunch break, employers cannot round it up to count as a full 30 minutes.

Employees who take shortened breaks are entitled to compensation for the lost time, and even small reductions can add up significantly over time.

The 2023 California Rounding Rules: A Big Change

California's time rounding rules have evolved, becoming even more defined in 2023. The case Camp v. Home Depot USA, Inc. brought significant changes, with the Court of Appeal ruling that if an employer has the ability to track exact working hours, they must compensate employees down to the minute.

In this case, Home Depot recorded employees' exact work hours but failed to pay them accordingly, leading to unpaid wages accumulating over time. While the court did not ban time rounding outright, this decision cast doubt on the precedent set by See's Candy, signaling a shift toward stricter enforcement of accurate wage payments.

What Should Employers in California Do?

California employers should review and update their time rounding policies to ensure compliance with wage laws. Any rounding practices must be applied fairly and never result in employees being underpaid.

Maintaining accurate records and adhering to legal standards helps prevent costly mistakes. The last thing an employer wants is to discover that a minor payroll error, repeated over time, has led to significant financial and legal consequences.

The Benefits of Using an Accurate Time-Tracking System

Even if companies decide to round time, there are benefits of choosing accurate systems. Using accurate tracking is the answer.

A good California break-tracking software tracks everything, up to the last second and is important to keeping things on track. By doing this you can make sure that they get paid completely for their paid hours work.

These solutions make the calculations of all time periods and hours easier. Also, the employee needs to know they are properly taken care of in regards to labor standards, so that there are no complications in the end. The most secure way is precise timing.

A wage and hour attorney would say that using accurate time tracking is a good business decision.

Keep an Eye on California's Labor Law Future

Staying updated is key to all legal operations and pay. California aims to protect worker rights and wants employers to do the right thing by paying all workers fair and honest pay.

Laws and court cases will get decided further so this should continue. Time-rounding practices are only one possibility of something being obsolete in our fast-moving era.

This could be coming sooner than one might even expect. Having time tracking set ahead, will be extremely important, even more for 2025.

Conclusion

Time rounding in California appears to be facing increased scrutiny. While businesses initially had practical reasons for using it, legal trends are shifting toward greater accuracy in payroll practices.

Time rounding is still allowed, but only if it remains fair or neutral, ensuring employees are fully compensated for their actual working time. Courts at all levels continue to push for precise timekeeping, reinforcing the importance of paying employees for every minute worked.

California has rejected the notion that small increments of work time can simply be disregarded for convenience. Timekeeping accuracy matters—not just for payroll compliance, but for ensuring employees receive the proper amount of rest and break time. The fairest approach is to use systems that track time in precise increments, such as to the nearest one-tenth of an hour. And when it comes to meal breaks, rounding is strictly prohibited—30-minute breaks must be honored in full under California law.