The California supreme court provided further guidance on employer obligations to provide meal breaks as required under the Labor Code and applicable Wage Orders.  In Donohue v. AMN Services LLC, the California supreme court held that employers may not use time rounding policies in context of meal periods, and time records for meal periods that are incomplete or inaccurate raise a rebuttable presumption of meal period violations.  Here are five key takeaways from the opinion for California employers:

1. Reminder of meal break timing requirements

The California supreme court reiterated that, as it set forth in Brinker Restaurant Corp. v. Superior Court (2012), “employers must generally provide ‘a first meal period [of at least 30 minutes] no later than the end of an employee’s fifth hour of work, and a second meal period [of at least 30 minutes] no later than the end of an employee’s 10th hour of work.”  And that an employer “satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so. . . .  [¶]  . . . [T]he employer is not obligated to police meal breaks and ensure no work thereafter is performed.”

Under Brinker, “[t]here is no meal period violation if an employee voluntarily chooses to work during a meal period after the employer has relieved the employee of all duty.”

2. Time rounding for meal breaks is not permitted under California law

The California Court of Appeal held in See’s Candy Shops, Inc. v. Superior Court (2012) that employers may use time rounding policies to calculate regular and overtime wages “if the rounding policy is neutral on its face and as applied.”  The supreme court noted that it has “never decided the validity of the rounding standard” set forth in See’s Candy, but even assuming the holding is valid, such a rounding policy in regards to meal periods “does not comport with its neutrality standard.”  The supreme court explained that in context of regular and overtime wages, a rounding policy “averages out” and it is possible that employees are “fully compensated over a period of time.”

In contrast, when viewed in the meal break context, an employee’s 30-minute meal break could lose 9 minutes due to rounding, which amounts to nearly a third of the meal break.  If an employee is not provided a full 30-minute meal break because of rounding, there is no mechanism that makes up for the premium pay owed to the employee that would average out over time.  The supreme court held, “The precision of the time requirements set out in Labor Code section 512 and Wage Order No. 4 — “not less than 30 minutes” and ‘five hours per day’ or ‘ten hours per day’ — is at odds with the imprecise calculations that rounding involves.  The regulatory scheme that encompasses the meal period provisions is concerned with small amounts of time.”

3. Rebuttable presumption against employer if time records show meal period violations

The supreme court explained that if an employer’s “time records show missed, short, or delayed meal periods with no indication of proper compensation, then a rebuttable presumption arises.”  The court explained that a rebuttable presumption arises against the employer if “time records show missed, short, or delayed meal periods with no indication of proper compensation.”  The “proper compensation” referred to by the court is the premium pay of one hour of pay at the employee’s regular rate of pay for each workday that the meal period is not provided.  The court explained that, “Employers can rebut the presumption by presenting evidence that employees were compensated for noncompliant meal period or that they had in fact been provided compliant meal periods during which they chose to work.”

What type of evidence could employers use to rebut this presumption?  The court explained that representative testimony, surveys and statistical analysis are some types of evidence that employers could present to rebut the presumption.  In addition, employee attestation forms that they received their meal breaks may also be evidence as explained below.

4. Potential use of employee acknowledgements confirming breaks were taken

The supreme court explained that if an employer’s records do not show a compliance meal break was taken by the employee, it may be possible for the employer to use electronic attestations at the time an employee does not take a full meal break, a late meal break, or misses a break in order to ensure accurate tracking.

In Donohue, the employer’s timekeeping system provided a dropdown menu that prompted the employee to choose one of three options:

  1. “I was provided an opportunity to take a 30 min break before the end of my 5th hour of work but chose not to”;
  2. “I was provided an opportunity to take a 30 min break before the end of my 5th hour of work but chose to take a shorter/later break”;
  3. “I was not provided an opportunity to take a 30 min break before the end of my 5th hour of work.”

The employee was required to choose an option by the end of the pay period, and if the employee selected item #3, they were paid a premium wage for the missed break.  The supreme court explained that this procedure “would have ensured accurate tracking of meal period violations if it had simply omitted rounding.”

5. Potential use of biweekly certifications by employees that they received meal periods

The employer in Donohue also argued that its biweekly certifications signed by employees show there were no meal period violations.  The certification stated:

I was provided the opportunity to take all meal breaks to which I was entitled, or, if not, I have reported on this timesheet that I was not provided the opportunity to take all such meal breaks.

Because the employer used time rounding to record the meal periods, the plaintiff argued that these certifications were not valid as the employees were not on notice of potential violations.  In addition, plaintiff argued that the certification “should be discounted because employees had to sign them to get paid.”  The court did not rule on the effect that the certification would have in this case and left the issue to be addressed by the trial court on remand.  However, it does raise considerations for employers to review the use of certifications that can be used as evidence to rebut the presumption of any time records showing potential meal period violations.