Donohue v. AMN Services, LLC (2018 WL 6445360) was recently decided by California’s Court of Appeal, Fourth District, and adds further nuance to the state’s wage and hour laws. Donohue, a nurse recruiter formerly employed with AMN Services, filed a wage and hour class and representative action alleging, among other things, a failure to pay overtime and minimum wages. Both the plaintiff and the defendant filed multiple motions for summary adjudication, several of which addressed the issue of whether AMN Services’ time-rounding policy was lawful. The unique rounding policy at issue rounded the actual time clocked in or out by AMN Services’ employees to the nearest ten-minute increment, up or down, and paid the employees based on the rounded time. The court of appeal confirmed this time-rounding policy complied with California law because it was neutral as “neither the employer nor the employee benefits from the policy,” and further found it was applicable to meal periods.
During her employment, Donohue earned a base hourly rate plus commissions, bonuses, and other forms of performance-based pay. AMN used a computer-based timekeeping system called “Team Time” for all nonexempt employees, including nurse recruiters. These recruiters used their computers to “punch in” for the day or upon return from a meal break, and “punch out” when leaving for a meal break or at the end of the day. AMN’s timekeeping system rounded the recruiters’ punch times (both in and out) to the nearest ten-minute increment, up or down. To establish a recruiter’s hourly compensation, AMN would convert each 10-minute increment to a decimal, total the number of hours, and multiply the total hours by the recruiter’s hourly rate.
Notably, whenever a recruiter’s rounded punch times resulted in a noncompliant meal period time (i.e., a meal period less than thirty minutes, or no opportunity for a meal period before the sixth hour of work), a drop-down menu appeared on the recruiter’s computer screen beneath the punch times for the date in question. The drop-down menu required the recruiter to indicate whether the employee was (1) provided a meal period but chose not to take it; (2) provided a meal period but took a shorter meal period; or (3) not provided an opportunity for a meal period. The recruiter’s pay was adjusted accordingly with premium pay for missed meal periods as necessary.
The court of appeal examined whether this policy complied with California law and the rules established in Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 and See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889 in particular.
See’s Candy established the rule that an employer is entitled to use a rounding policy “if the rounding policy is fair and neutral on its face and it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” (See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 907.) Brinker, meanwhile, was specifically applicable to the management of meal periods. There the court held that “an employer’s obligation is to relieve its employee of all duty” during a meal period, “the employer need not ensure that no work is done”; rather, “the employee [is] thereafter at liberty to use the meal period for whatever purpose he or she desires.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1017.)
Ultimately, the court in Donohue determined that AMN’s time-rounding policy described above was fair and neutral on its face, and that there was no reason a time-rounding policy could not be applied to meal and rest periods.
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