Under state and federal law, non-exempt workers must be paid a minimum wage for all hours worked. California has enacted one of the country’s highest minimum wages, which will eventually hit $15 an hour for the majority of the State’s employees. In California, under nearly all circumstances, you must be paid at least minimum wage of each minute you spend working for your employer.
Despite this clear requirement, many employers in California have instituted policies that round employees’ time punches to the nearest five minutes, quarter hour, or other increment. A typical rounding policy might look like this: if you clock in three minutes early and start working, you are not paid for this time; and if you stay five minutes late to finish your work, you are not paid for this time, either. These policies can often be illegal and deprive employees of wages they have legally earned.
Rounding Policies May Look Legal but Are Often Designed to Cheat Employees of Pay
Under California law, a rounding policy is only allowed when the policy is (1) fair and neutral on its face and (2) is not used to deprive employees of wages over time. The policy must not result in underpayment when applied to all employees over time.
While somewhat technical, these two requirements can be generalized to mean that rounding policies are illegal if they are (1) one-way (they always cheat the employee), or (2) actually disadvantage employees over time. So, if an employer rounds when you are late from 8:02 a.m. to 8:05 a.m., but doesn’t round when you leave early from 7:58 p.m. to 8:00 p.m., that policy is illegal. If a policy rounds to the nearest quarter hour but employees tend to arrive late more often than they leave early and employees are paid less on average than they would be if their time was tracked to their actual time punches, the policy is illegal.
Any policy that rounds employee time as a penalty—like automatically deducting five additional minutes of time when you are late—is always illegal. You are entitled to wages for all time worked, even if your employer is mad at you or you broke an internal rule.
Minimum Wage Must Be Paid for All Time Worked
In California—unlike under federal law—your employer cannot escape paying your wages for all time worked, regardless of how little time, because it is “too difficult” to track small increments. The California courts know that we live in a modern time and it's very easy to track to your time to the minute. Your employer cannot pretend that paying for that work would be too much effort for too small amount. After all, what is too small for a massive corporation is often quite large to your average American family. Troester v. Starbucks Corp., 5 Cal. 5th 829, 847 (2018) (“Troester is seeking payment for 12 hours and 50 minutes of compensable work over a 17-month period, which amounts to $102.67 at a wage of $8 per hour. That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares. What Starbucks calls “de minimis” is not de minimis at all to many ordinary people who work for hourly wages”).
So Can My Employer Dock Me 15 Minutes When I Am a Few Minutes Late?
Under California law, probably not. A policy that always rounds down is not facially neutral and is illegal. Similarly, the Fair Labor Standards Act (FLSA) and federal law would not allow a policy that always rounded down and consistently penalized employees by underpaying them.
What Happens If You're Not Paid for All Hours Worked
When an employer pays you less than minimum wage, you are entitled to recoup the unpaid wage amounts and penalties in the amount of the underpaid wages. That is, you can recover up to twice the amount of underpaid wages, as well as legal fees spent in trying to get your wages. This is in addition to many other penalties that apply to these situations, including penalties under California’s Private Attorneys General Act.
Equally importantly, your employer cannot retaliate against you for exercising your right to be paid the minimum wage. This means they cannot threaten to discharge, demote, suspend, or in any manner discriminate against you for exercising your right to minimum wages, including demanding the minimum wage, asking about being paid the minimum wage, or complaining about other illegal wage practices.
Talk to an Experienced Minimum Wage and Employment Lawyer
At King & Siegel LLP, we have helped hundreds of workers hold employers accountable through legal actions. If you have been discriminated against, retaliated against, denied your rightful wages, or wrongfully terminated, our attorneys are here to help.
Need legal help? We provide free, confidential consultations to California workers. You should contact us as soon as possible to make sure your claim is still within the time limits set by law. If you are a victim of wage theft or other violations of the employment laws, contact us today through our website or give us a call at (213) 214-3757 to schedule a free consultation.