California Labor Law Overview
California labor laws encompass a wide range of regulations, including provisions that pertain to timekeeping and points of clocking in and out. Beyond mere formality, California labor laws concerning time are established to protect the collective rights of employees, employers and the state by reinforcing a clear understanding of time frames for various activities. Some of the regulations focus particularly on hours worked, as the Labor Code mandates how this is documented, preserved, explained and applied to wage calculations.
Unlike a typical corporate or private setting, laws regarding time and timekeeping practices in California are often dictated by a collective bargaining agreement (CBA) . While CBAs can account for a wide range of topics and concerns, they frequently include terms that explain the procedures that relate to starting and ending each workday. These CBAs often provide definitions for terms that encompass every conceivable situation, from breaking for lunch to overtime pay.
Whether the workplace is governed under a CBA or other written policy, California labor laws are concerned with compensating employees accurately for the work they complete. Clocking in or out correctly should reflect these hours closely, as these are the basis for an employee’s wages and may determine the validity of a claim for unpaid time. Paying close attention to clocking practices as mandated by the law puts employers in the position to avoid any legal entanglements.
Clocking In and Out: The Legal Requirements
One major decision of the California Labor Department is that every employee (and they will consider you to be an "employee" if you work anywhere in California, not just in San Diego County), with the exception of those specifically excluded by law, must clock in and out (punch in and out, use a time clock, or otherwise indicate the times they report to work and leave work for the day).
Now, employers can implement whatever system they want-time sheets, time clocks, etc.-as long as it accurately reflects what you actually did. So, for example, the company can round up minutes for your lunch, but not down (and certainly not 30 minutes for a 10 minute lunch).
This means that if you are not being allowed to accurately record the times you report for and leave work, then that is a violation of labor laws, either state or federal. You should file both an administrative and civil complaint. Failing to allow employees to clock in and clock out, is an illegal action by the employer, and a practice that is disallowed by the Labor Department.
Common Mistakes Employers Make
One of the most common errors employers make in clocking practices in California is after the fact adjustment of time punch records or not having sound expectations and reminders to employees about their clocking practices. Although labor code section 9(a) provides that time changes within rounded periods are not penalized, substantial labor code support is regarding "rounds" for 1-5 minutes before and after an employee’s "arrival time, departure time, lunch period and rest period." It is not clear if this rounds approach can be used for 6 minutes or more beyond the rounded clocked date. There is case law that notes that rounding up on a "de minimis" basis is permitted, but this is not fully settled law and plaintiffs’ lawyers have seized on it like other legal issues to broaden their lane. It has become more common for companies to key cards, time clocks or other tracking devices to monitor all time off the clock from the required start time to the required end time. The advantage of that view with strict policies of punctuality, etc. and disciplining for tardies and absence from the work stations without proper clock outs is that there is more certainty and control for the employer. Hopefully, you can work it out with employees to have them come to work and not require time adjustments. Although the law does permit round up of 5 or more minutes plus under wage orders, there can be a downside that it may increase the employees overtime. For some companies, however, it is now more important than the time reasons to have tractor beams on all employees and know exactly when they are on the premises and at their work stations.
Rights and Responsibilities of Employees
Employers are entitled to have their non-exempt employees "clock in and out" of work, and they have an affirmative duty to maintain accurate time records of each employee. However, California labor laws also afford non-exempt employees the right to collect minimum wage for all hours worked (including compensable off-the-clock time that is not recorded in their time records so long as the non-exempt employee timely reports the off-the-clock time so the employer has the opportunity to pay for it). It is also a defense to unpaid wages for an employer to show that an employee either has no damages or has been fully paid for compensable time.
An employee’s simple clocking-in or clocking-out does not foreclose his or her claim to unpaid wages for time worked before or after the employee performs the act of clocking in or out. However, if an employer precludes its employees from performing any work after clocking out, then the employer may avoid liability for off-the-clock work, provided it can show the employees have been forced to refrain from working by means of a written anti-dun lag.
That said, an employee may claim compensable time whether or not the employer has instructed him or her to do work after clocking out, notwithstanding an anti-dun lag. A court has held that the employee’s duty not to clock in until after the start of the workday, and to clock out until after the end of the workday, does not preclude the employee from later asserting that he or she performed work before or after the start and the end of the work day outside the duties that the employee was required to perform before and after his or her scheduled start and end times. In other words, if an employee comes in early or stays late to produce compensable work outside of his or her job duties that the employer has not authorized, and the employee’s duties do not expand but only continue into previously uncompensated time, the employee may collect for the uncompensated time unless the employee is barred from doing so by a valid anti-dun lag.
California’s anti-dun lag statute provides that an employer may avoid liability for work performed after the employee clocks out if it has created a reasonable and uniformly enforced anti-dun lag policy, and the employee has ignored it. The policy must (1) expressly authorize employees to perform no more duties after their shift has ended other than their ongoing duties; and (2) expressly require employees to clock in again if they have performed any work before the beginning of their next shift. Non-compliance by an employee who does not clock in again is considered a prima facia breach.
If an employer adopts an anti-dun lag policy and uses it to deny an otherwise valid claim for unpaid wages, its defense may be insubstantial if the policy is not uniformly enforced.
Penalties for Non-Compliance
Consequences of Non-Compliance Law: The potential legal consequences for violating this law can be severe if the employer tries to manipulate their records or alter any employee’s clock in/out time. This will generally fall under Labor Code sections 201 through 213 (Payment of Wages; Discharge). It could also result in an active investigation by the California Division of Labor Standards Enforcement, or DLSE.
Recent Board Decision: In the case of Alcantar v. Hobart, Bakeries Division, an employee discovered that the time card information had been manipulated by the employer so that she would not be owed any overtime hours. She then filed a lawsuit. The trial court granted a summary judgment against the employee and said that the employee had time records showing less time worked, than what actually occurred. The court said that the employee could not have proven any lost wages in court. This case was decided in favor of the employer.
But the employee appealed this decision. The Court of Appeals of California reversed the decision in the employee’s favor and said that since the employer tampered with the employee’s record, this was sufficient to prove the employee lost wages. The Court reasoned that the employee was not required to provide evidence how much the employee resisted all this misconduct.
The Court said that when an employer engages in such misconduct , it creates an inference that the employee suffered unpaid overtime from the employer’s concealed time. And the Court said that once the inference exists, the burden of proof shifted to the employer to show it did not owe the employee additional overtime pay.
The Court rejected the employer’s argument that the employee failed to prove the employer willfully engaged in the misconduct. The Court said that once the inference of liability is created, the employer has to show that it reasonably believed its conduct was lawful. The Court said that the employer is at fault if it turns out that it really did owe the employee money, if it did not take steps to learn whether its understanding of the facts was right. The Court said that in this case, the employer failed to show ignorance of how many overtime hours it owed the employee, so the inference of liability remains in place.
The test used by the Court to determine whether there are violations is the "totality of circumstances, including contemporaneous witness testimony." (Bishop v. Georgia-Pacific Corp. (2008)). In this case, the Court said that the employer’s conduct fell below the standard of what a reasonably prudent employer should do to ensure compliance with labor law obligations. Therefore, the trial court will set a trial date for the employee to win her case.
Technological Approaches to Compliance
Employers can find technological solutions to maintaining compliance with California’s clocking in and out laws. For example, employers can utilize time-tracking software to operate on a tight clock, ensuring employees do not forget to punch in or out for break times. Time-tracking software can allow employers to run reports, including pay period/employee-wise reports. These reports will assist employers in identifying any late punches which may reduce wage theft claims for missed meal and rest breaks. Further, these reports can help employers identify employees who are consistently generating "late" punches such that appropriate, individualized disciplinary action may be taken. Failing to take almost any of the above-listed steps to remain compliant with California law is a surefire way to generate class action wage theft claims. Technology can help employers impose a tighter clock with ease. Multi-factor authentication, requiring two forms of identification which can include biometric data, ensures proper use of time keeping software. Employers can also implement "geo-fencing" technology and digital time keeping software to ensure employees are punching in and out at proper locations. This can help employers in the event employees are being misclassified as exempt employees, for instance.
Geofencing can also assist employers in the event employees forget to clock out for meal breaks by sending notifications to managers or the employees themselves reminding them to take their meal period. Employers can also further safeguard against wage theft claims by improving their time keeping software. For example, employers can improve their software by having it round to the nearest 5- or 15-minutes (e.g. 9:05 or 9:12 rounds to 9:15). This gets away from the earlier problem of having discrepancies in the time rounding system. Determining when employees are on and off the clock can also be improved by investing in biometric timekeeping systems, which take a sample of an employee’s fingerprint or other identifying marker, and eliminating the use of a physical timecard. This safeguards against common wage theft claim allegations which assert that someone else is clocking in and out for employees, especially in drug or alcohol testing settings.
Recent Changes to the Law
The California labor board recently addressed the issue of employers requiring employees to use touch-screen time clocks. The board indicated that it is common for many employers to have such systems, noting that it is a matter of practicality from a business standpoint. Nevertheless, there are certain rules the employers must comply with even if they are using such time clocks.
The question of whether changes to shift schedules count as "hours worked" was litigated in the case Department of Fair Employment and Housing v. 21st Century Ins. Co. (2015) 243 Cal.App.4th 381. There, an emergency call center employee was uncovered Class Action violations for various labor code violations. In particular , the court found that when employees return to the office before their shifts they must be paid from the moment they begin performing work, even if they perform only menial tasks.
Another recent case clarifying clocking in and out is Mendiola v. CPS Security Solutions, Inc. (2015) __ Cal.4th __. The question was whether employers should pay for "off the clock" work performed by employees. The court there found that the employer must pay for any work performed off the premises, but only if the employee should have been paid had the work not been performed off-site. If there had been no off-site work, the employee would likely not have performed the off-site work and would have performed the work on-site, in which event the employee would have been paid.