68 Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) Seyfarth Shaw LLP | www.seyfarth.com quarter-hour.391 The plaintiff had shown that the rounding policy resulted in her losing time in 55.1% of her shifts, and that a separate sample group of employees lost time in 54.6% of their shifts.392 Ferra held that “[t]his is not sufficient to show that the rounding policy ‘systematically undercompensate[s] employees.’”393 While the federal rounding standard and See’s permitted rounding policies where the majority of employees were overcompensated, Ferra stated that a rounding policy does not require that employees be overcompensated.394 Rather, a rounding policy can be “fair and neutral” on its face even where a “small majority” of employees lose compensation.395 While the California Supreme Court later overturned Ferra on other grounds, the Court of Appeal’s discussion on rounding should remain good law. After See’s and Ferra, California employers should be able to employ neutral rounding policies in their timekeeping systems.396 Rounding policies that round only in favor of the employer, however, are improper. Furthermore, properly implemented, facially neutral rounding policies are defensible under Ferra but may still be subject to claims that they tend to result in underpayment to more than a “small majority” of employees over a period of time, and thus result in litigation. While neutral time rounding generally remains lawful in California, rounding is not lawful with respect to meal periods. In Donohue v. AMN Services, LLC, the California Supreme Court reversed a Court of Appeal decision that meal period times can be rounded.397 Donohue held that rounding is improper in the meal period context, as even a slightly short meal period is not consistent with the requirement to provide a full 30-minute meal period. The general neutrality standard set forth in See’s thus does not apply in the meal period context. D. Compensability of Time Spent in Security Checks Plaintiffs’ lawyers have argued that California retailers must compensate nonexempt employees for time spent undergoing security inspections as they leave the store. A 2014 U.S. Supreme Court decision, Integrity Staffing Solutions v. Busk, held that the time that warehouse employees spent waiting to undergo security screenings was not compensable under the FLSA. The Supreme Court reasoned that the screening activity was not “integral and 391 Ferra v. Loews Hollywood Hotel, 40 Cal. App. 5th 1239, 1253 (2019), rev'd on other grounds, 11 Cal. 5th 858 (2021). The California Supreme Court reversed the Court of Appeal’s judgment in Ferra based on a question of interpretation of premium pay for meal and rest periods, and did not consider any issues related to rounding. 392 Id. at 1253-54. 393 Id. at 1254. 394 Id. at 1255. 395 Id. 396 See also AHMC Healthcare, Inc. v. Superior Court, 24 Cal. App. 5th 1014 (2018) (noting that “the regulation does not require that every employee gain or break even over every pay period or set of pay periods analyzed; fluctuations from pay period to pay period are to be expected under a neutral system,” and finding that employer’s rounding policy was lawful even where certain employees were undercompensated because the evidence established that the rounding system “did not systematically undercompensate employees over time”); Corbin v. Time Warner Entm'tAdvance/Newhouse P’ship, 821 F.3d 1069, 1079 (9th Cir. 2016) (adopting a common sense approach to an employer’s rounding practice and affirming summary judgment for an employer, holding that the practice complied with both federal and California law); David v. Queen of the Valley Medical Center, 51 Cal. App. 5th 653 (2020) (rounding practice was lawful even though 53 percent of rounded time favored the defendant, and plaintiff lost, on average, 1.56 minutes of time per shift). 397 Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021).
RkJQdWJsaXNoZXIy OTkwMTQ4