Set aside, for a brief moment, the legal arguments about rounding in the context of California law (I know...it's a legal blog, but I can digress because I say so). Here's what I don't get in the class context: how does it pass the smell test to say to some employees, who lost some wages from rounding, that it's cool because their money basically went to some other employees. Using the rationale of rounding jurisprudence, I think I could make wage system that randomly takes money from half a workforce and gives it to the other half. It's neutral as applied by definition. It's random so it's "fair" on its face. What's wrong with that? And if it's not okay, why is rounding okay.
Anyhow, in AHMC Healthcare, Inc. v. Superior Court (June 25, 2018), the Court of Appeal (Second Appellate District, Division Four) held that rounding was proper in a system the Court characterized as "neutral on its face and as applied." Slip op., at 2. On undisputed facts, it was shown that slightly more employees lost time than gained time, but the gainers did slightly better in aggregate. Slip op., at 4-5.
After discussing federal decisions that approved of rounding in the aggregate, the Court said this:
Because California’s wage laws are patterned on federal statutes, in determining employee wage claims, California courts may look to federal authorities for guidance in interpreting state labor provisions.
Slip op. at 11. I don't think that's right, at least not as stated. California extensively diverges from federal wage and hour law in many areas. The California Supreme Court has issued a number of decisions rejecting application of federal law in a variety of contexts, noting in several cases that Wage Orders must basically state express incorporation of a federal standard before it will be read into a Wage Order. Notably, and I think relevant to rounding, California's definition of what constitutes compensable time differs from the federal standard. What no Court has yet attempted to explain is why rounding is not analyzed in the way other wage and hour obligations are analyzed when comparing California law to federal law. Given the undeniably employee-centric nature of California wage and hour law, I find this at least peculiar.
This issue will receive more attention before it is settled I predict.
Jeffrey P. Fuchsman and Zareh A. Jaltorossian of Ballard Rosenberg Golper & Savitt represented the successful petitioner.