Ninth Circuit Case on Rounding of Employees Time

In the 9th Circuit case of Andrew Corbin v. Time Warner Entertainment- Advance the Court addressed the issue of employers who round off time worked by employees in computing their wages.

In the Corbin case the employer rounded time off to the nearest quarter hour.  As stated by the Court, "This case turns on $15.02 and one minute. $15.02 represents the total amount of compensation that Plaintiff Andre Corbin (“Corbin”) alleges he has lost due to his employer’s, Defendant Time Warner EntertainmentAdvance/Newhouse Partnership (“TWEAN”), compensation policy that rounds all employee time stamps to the nearest quarter-hour. One minute represents the total amount of time
for which Corbin alleges he was not compensated as he once mistakenly opened an auxiliary computer program before clocking into TWEAN’s timekeeping software platform. $15.02 in lost wages and one minute of uncompensated time, Corbin argued before the district court, entitled him to relief under the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201, et seq., and various California state employment laws.  The district court disagreed and granted summary judgment to TWEAN. The court determined that because the company’s rounding policy was neutral on its face and in practice, TWEAN’s policy complied with the federal rounding regulation, see 29 C.F.R. § 785.48(b), and Corbin’s $15.02 in lost wages did not present an issue of material fact. The court also held that the one minute of uncompensated time Corbin spent logging into an auxiliary computer
program before logginginto TWEAN’s timekeeping software was de minimis as a matter of law."

Time Warner, using a software program know as a "soft phone system", tracked each employee's hours by having the employee essentially log in to their phone system.  The employee had to do this to be allowed to start receiving phone calls at the call center where their job of course required them to respond to customers over the phone.  For example, an employee who clocked in at 8:07 a.m. to begin his workday would see his wage statement reflect a clock-in of 8:00 a.m., rounding his time to the nearest quarter-hour and crediting him with seven minutes of work time for which he was not actually on the clock. Similarly, an employee who clocks out at 5:05 p.m. to end her workday would see her wage statement reflect a clock-out of 5:00 p.m., again rounding her time to the nearest quarter-hour and deducting five minutes of work time for which she was actually on the
clock. At the end of each pay period, TWEAN’s non-exempt employees are paid in accordance with these rounded figures.

The Court noted that for more than fifty years, a federal regulation has endorsed the use of “‘Rounding’ practices.” See Wage and Hour Division, Department of Labor, 26 Fed. Reg. 190, 195

(January 11, 1961). Codified at 29 C.F.R. § 785.48(b), the current regulation reads in full:

“Rounding” practices. It has been found that in some industries, particularly where time

clocks are used, there has been the practice for many years of recording the employees’

starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or

quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work. For enforcement purposes this practice of computing working time will be accepted, provided that 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. This regulation permits “employers to efficiently calculate hours worked without imposing any burden onemployees,” offering employers a “practical method for calculating work time” and a “neutral calculation tool for providing full payment to employees.”

Ultimately, on the rounding of time issue the Court held:

"First, Corbin offers no case support for the proposition that California’s law is at odds with the federal rounding regulation and cites to no precedent that endorses his argument. Second, the only case to address Corbin’s argument, See’s Candy, explicitly rejected it. 210 Cal. App. 4th at 905–06. There, the California Court of Appeal explained that the federal rounding regulation had long successfully coexisted with FLSA’s own rule mandating overtime pay after forty hours of

work over the course of a week. Id. at 906. “There is no analytical difference,” the court pointed out, “between rounding in the context of daily overtime and rounding in the context of weekly overtime.” Id. We agree. Over the long term, TWEAN’s rounding system is neutral, favoring neither employer nor employee. Third, TWEAN’s rounding policy allows employees to gain overtime compensation just as easily as it causes them to lose it. For example, an employee who clocks in for eight hours and eight minutes of work in a day, will see those eight minutes rounded up to fifteen minutes—all of which will be compensated at the overtime rate.8 Like the California Court of Appeal, we can discern no reason to analyze overtime minutes any differently than regular-time minutes, and the district court committed no error by treating them the same."