CACI No. 2775. Nonpayment of Wages Under Rounding System - Essential Factual Elements

Judicial Council of California Civil Jury Instructions (2023 edition)

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2775.Nonpayment of Wages Under Rounding System - Essential
Factual Elements
[Name of plaintiff] claims that [name of defendant] owes
[him/her/nonbinary pronoun] wages for unpaid work time because [name
of defendant]’s policy or practice of adjusting employees’ recorded time
to the nearest [specify preset increment of time] failed to compensate [name
of plaintiff] for all time worked. This practice is often referred to as
“rounding.”
To establish this claim, [name of plaintiff] must prove all of the following:
1. [That [name of defendant]’s rounding policy is not fair and neutral
on its face];
1. [or]
1. [That, over time, [name of defendant]’s method of rounding
resulted in failure to pay its [employees/specify subset of employees
to which plaintiff belonged] for all time actually worked];
2. That [name of defendant]’s method of rounding resulted in lost
compensation for [name of plaintiff]; and
3. The amount of wages owed to [name of plaintiff].
New December 2022
Directions for Use
This instruction is intended for use in cases involving the rounding of time clock
entries at the start or end of shifts. Do not use this instruction for cases involving
the rounding of time entries in the meal break context, which is unlawful. (See
Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, 68 [275 Cal.Rptr.3d 422, 481
P.3d 661] [“The practice of rounding time punches for meal periods is inconsistent
with the purpose of the Labor Code provisions and the IWC wage order”].)
If the court has determined that the defendant’s rounding method was fair and
neutral on its face, use only the second option for element 1. (See AHMC
Healthcare, Inc. v. Superior Court (2018) 24 Cal.App.5th 1014, 1028 [234
Cal.Rptr.3d 804]; See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th
889, 907 [148 Cal.Rptr.3d 690].) The jury will need to resolve any factual disputes
concerning (1) whether the rounding method consistently resulted in failure to pay
all employees or a subset of employees to which plaintiff belonged for all hours
worked and (2) whether the plaintiff has lost wages over time as a result of the
defendant’s rounding method.
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Sources and Authority
Use of Time Clocks. 29 C.F.R. § 785.48(b).
“Nothing in our analysis precludes a trial court from looking at multiple
datapoints to determine whether the rounding system at issue is neutral as
applied. Such analysis could uncover bias in the system that unfairly singles out
certain employees. For example, as the trial court discussed, a system that in
practice overcompensates lower paid employees at the expense of higher paid
employees could unfairly benefit the employer.” (AHMC Healthcare, Inc., supra,
24 Cal.App.5th at p. 1028.)
“Although California employers have long engaged in employee time-rounding,
there is no California statute specifically authorizing or prohibiting this practice.”
(See’s Candy Shops, supra, 210 Cal.App.4th at p. 901.)
“Relying on the DOL rounding standard, we have concluded that the rule in
California is that an employer is entitled to use the nearest-tenth 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, supra, 210 Cal.App.4th at p. 907, internal citations omitted.)
“Whether a rounding policy will ‘result in undercompensation over time is a
factual’ issue. Summary adjudication on a rounding claim may be appropriate
where the employer can show the rounding policy does not systematically
underpay the employee, even if the employee loses some compensation over
time.” (David v. Queen of Valley Medical Center (2020) 51 Cal.App.5th 653,
664 [264 Cal.Rptr.3d 279], internal citation omitted, original italics.)
“[T]he 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. We further agree with the
court in See’s I and See’s II that a system is fair and neutral and does not
systematically undercompensate employees where it results in a net surplus of
compensated hours and a net economic benefit to employees viewed as a
whole.” (AHMC Healthcare, Inc., supra, 24 Cal.App.5th at pp. 1027-1028.)
Secondary Sources
3 Witkin, Summary of California Law (11th ed. 2017) Agency and Employment,
§ 434
1 Wilcox, California Employment Law, Ch. 3, Determining Compensable Hours and
Proper Payment Amounts, § 3.02 (Matthew Bender)
California Civil Practice: Employment Litigation, §§ 4.1, 4.21 (Thomson Reuters)
2776-2799. Reserved for Future Use
CACI No. 2775 LABOR CODE ACTIONS
106

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