Donohue Decision Changes the Rules Regarding Rounding of Time Records for Meal Periods

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Litigation concerning meal periods has been plentiful in California for over ten years, and a new decision from the California Supreme Court is almost certain to assure that the trend continues.

In Donohue v. AMN Services, LLC, the company used an electronic timekeeping system to track the work hours of its non-exempt employees, and the software rounded time entries to the nearest increment of ten minutes. If an employee began a meal period at 11:02 a.m., for example, and clocked back in at 11:26 a.m. (a potentially non-compliant 24-minute meal period), the software would record the time punches as 11:00 a.m. and 11:30 a.m., representing a compliant meal period. The plaintiff filed a class action suit alleging that AMN Services denied meal periods to non-exempt employees, improperly rounded time records for meal periods, and failed to pay the one-hour premium for non-compliant meal periods. In its decision, the Supreme Court re-affirmed its ruling in Brinker Restaurant Corp. v. Superior Court that employers are required only to provide non-exempt employees with an opportunity to take meal periods; they are not required to ensure that employees actually stop work and take a meal period. The Court also acknowledged that it has previously approved the rounding of time records in general, provided that the rounding (a) is fair and neutral on its face, and (b) “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 time they have actually worked.” The Supreme Court’s reference to its previous pro-employer rulings did not portend a favorable outcome for AMN Services, however. In Donohue, the Supreme Court ruled that rounding is not permissible with respect to meal periods, relying strongly on language in the Labor Code and the Wage Orders stating that meal periods shall be “not less than 30 minutes” in length. The Court left no room for doubt regarding the minimum necessary duration of meal periods; employees must be provided with the opportunity to take a full 30-minute meal period, and even a minute less is not sufficient to satisfy the law. The Supreme Court also ruled in Donohue that records reflecting non-compliant meal periods (i.e., meal periods of less than 30 minutes, or meal periods not commencing until after the employee has completed five hours of work) create a rebuttable presumption of a violation. When time records reflect a non-compliant meal period, the employer can rebut the presumption of a violation by presenting evidence that (a) employees were provided with the opportunity to take a proper meal period, but chose not to do so, or (b) the employer has already paid the premium that arises from a non-compliant meal period. The Donohue decision is likely to spawn another surge of litigation alleging violations of California’s meal period rules, and prudent employers should review their meal period policies and practices to minimize their risk of liability. What Should Employers Do Now?

• Maintain complete and accurate time records for non-exempt employees ‒ Employers should maintain records that reflect the precise times at which their non-exempt employees begin and end work each day, as well as the precise times at which they begin and end their meal periods. Handwritten records that reflect the exact same times each day, or only times that begin and end on the hour (i.e., 8:00 a.m. to noon and 1:00 p.m. to 5:00 p.m.), are likely to be viewed with suspicion.

• Do not round meal period times ‒ In the wake of the Donohue decision, employers should not round the times at which employees begin and end their meal periods, and should consider carefully whether to utilize rounding at all.

• Enable non-exempt employees to begin meal periods before completing five hours of work ‒ The law requires employers not only to provide meal periods of at least 30 minutes to non-exempt employees who work more than five hours in a day, but also to permit the employees to begin their meal period before they complete five hours of work.

• Adopt or update written policies, and consider requiring certifications from employees ‒ Employers that have not adopted written policies concerning meal periods should adopt policies consistent with the Brinker and Donohue decisions. Organizations which have policies in place already should review and revise them as necessary. Employers should consider requiring employees to submit a certification each week, or at the conclusion of each pay period, in which they either (a) confirm that they were provided with the opportunity to take meal periods and rest breaks in accordance with the law, or (b) identify occasions on which they contend that they were not able to take meal periods or rest breaks, which would enable the employer to address and resolve the issue before it can escalate to litigation.

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