Articles Posted in Rounding Time

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In order for plaintiffs to file a class action lawsuit, they have to file a proposal with the court for their lawsuit to be certified as a class action. After that it’s the responsibility of the judge to determine if the plaintiffs meet the requirements for a class action.

There are several requirements plaintiffs need to fulfill in order to qualify for class action status, but the two most important are probably the need for enough plaintiffs to justify class action status (numerosity) and that the alleged violations were common practice with the defendant instead of an occasional incident or mistake (commonality).  There are a few different ways for plaintiffs to prove they fulfill these two requirements, including providing a list of potential class members and/or testimony from named plaintiffs.

In the case of the recent overtime class action lawsuit against Gem Financial Services Inc., a pawnshop chain, the testimony of two of the named plaintiffs was enough to convince U.S. District Judge Brian M. Cogan that the employees sufficiently satisfy the commonality requirement for initial certification of the class.

David D., Diori J., and Natacha T. are the three named plaintiffs who, together, filed the class action wage and hour lawsuit against Gem Financial.

Diori worked as an accountant for Gem Financial and she alleged they made her submit inaccurate time records and pay employees the incorrect amount on a regular basis. Continue reading

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The Fair Labor Standards Act (FLSA) is a federal law that was put in place to protect workers from employers who might try to take advantage of them. In order to prevent this, the FLSA sets a minimum wage that all employers throughout the country must adhere to.

The FLSA also requires employers to pay all their hourly workers one and one-half times the employee’s normal hourly wage for all overtime worked. The FLSA defines overtime as any time spent working after eight hours a day or forty hours in a week. The FLSA does make some provisions for certain employees to be held exempt from these overtime regulations, but the law is very specific about the types of employees that can qualify for this exemption. Continue reading

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Many companies which use a time clock for their employees to punch into and out of at the beginning and end of their shifts also have a system of rounding the employees’ time. For example, if an employee punches in at 7:58am, the clock would round that to 8:00am. If the employee punches out at 5:02pm, the clock would round that to 5:00pm. While two minutes may not seem like much, it can add up over time.
Pamela Silva, an employee of See’s Candy Shops, was concerned about just that and filed a class-action overtime complaint against her employer. See’s used Kronos, a software system which recorded employees’ work hours. Employees would punch in at the beginning and end of their shifts and were required to record their lunch breaks. Although Kronos records the exact minute the employees punch in and out, See’s used the nearest-tenth policy to round out the time. The nearest-tenth policy is when a company rounds to the nearest tenth of an hour (every six minutes) beginning with the hour mark.

See’s also had a grace period system whereby employees could voluntarily punch in up to 10 minutes after the beginning of their shift or punch out up to 10 minutes before the end of their shift. The time was to be used for personal activities only, not for work.
The class was certified on two issues:
1) Whether the class members suffered a loss of compensation when they punched in and out of the Kronos time-keeping system and their time was rounded to the nearest tenth of an hour, and
2) Whether class members suffered a loss of compensation when they clocked in and out of the Kronos time-keeping system during the “grace period”.

See’s insisted that their nearest-tenth rounding policy was consistent with federal and California law. The trial court dismissed this defense and See’s appealed.
The Court of Appeals found that there is no California law which specifically allows for time-rounding policies. However, the Department of Labor has a regulation under the Fair Labor Standards Act which permits employers to use such policies under certain circumstances: “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. The Court of Appeals thereby ruled with See’s.

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Aside from making sure employees are paid for all applicable overtime hours, it is equally (if not more) important to make sure employees are paid for all straight time. Baltazar Mendez had worked for H. J. Heinz Company L.P. in the state of California as a non-exempt hourly factory employee for about ten years. He alleges that Heinz had a policy of penalizing employees for clocking in after the start of a shift and clocking out before the end of a shift and that this policy unfairly benefited Heinz. He also alleges that Heinz rounded off the time employees spent working so that straight time worked went unaccounted for and unpaid. Mendez also alleges that he worked overtime hours for which he was never paid.

Due to the policy of rounding employees’ time, Mendez is also alleging that Heinz failed to provide accurate itemized wage statements to its employees or to maintain accurate records of the hours employees worked. Mendez also alleges that Heinz has knowingly failed to pay due wages to its employees upon termination. It has now been more than thirty days since a number of the potential class members have been terminated without the wages which were due them upon termination so, according to California law, they are entitled to thirty days of wages.

Mendez is seeking certification of both a California Class as well as a Nationwide Class, as he believes that Heinz utilizes these illegal labor practices all across the country. This means that the classes could consist of hundreds, if not thousands of members. As compensation for Heinz’s alleged violations, Mendez is seeking unpaid straight and overtime hours, interest, and attorneys’ fees and costs.

Mendez also claims that these illegal labor actions on behalf of Heinz constitute false, unfair, fraudulent, and deceptive business practices which give Heinz an unfair advantage over competitors who pay their employees all due wages. Because of these alleged business practice violations, Mendez is also seeking an injunction against Heinz to prevent them from continuing, or ever again entering into, these illegal business practices.

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