Time Clock Rounding Rules and Recent Court Cases

Federal law has permitted time-clock rounding since 1961. The regulation is 29 CFR §785.48(b): employers may round to the nearest 5 minutes, one-tenth of an hour, or quarter hour, provided the rounding "will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." That single sentence has governed payroll-system design for six decades. It is now the most-litigated piece of federal wage-and-hour regulation in 2026.

The reason is California. Four cases over twelve years have narrowed rounding from a permissive default (See's Candy, 2012) to an effective ban when exact-time data exists (Camp v. Home Depot, 2022). Camp is pending at the California Supreme Court — review granted February 2023, briefing complete September 2023, still on the Court's official "Issues Pending" list as of April 2026. The Court's resolution will determine whether neutral rounding survives in any form in California. Most California employer-side counsel already advise clients to stop. The exposure is real: Home Depot settled rounding-and-adjacent claims for $72.5M in 2024 (Utne); Apple settled for $29.9M in 2022 (Frlekin). This guide covers what §785.48(b) actually says, the federal "neutrality" cases that built the doctrine, the California chain that is dismantling it, the state-by-state map (Oregon is the second-state mover post-Eisele), the recordkeeping cascade that turns small claims into class actions, and the 2024–2026 developments.

Try the time card calculator with §785.48(b) rounding →

Quick reference

• Federal floor (29 CFR §785.48(b)): rounding to the nearest 5 minutes, one-tenth of an hour (6 min), or quarter hour (15 min) is permitted. Must be "fair and neutral on its face" AND must not, "over a period of time," fail to compensate for all time worked. Corbin v. Time Warner, 821 F.3d 1069 (9th Cir. 2016) is the leading federal appellate decision approving neutral rounding.
• California (Camp v. Home Depot, pending at the Cal. Supreme Court): the leading California Court of Appeal authority holds that when the employer's timekeeping system can capture exact minutes, rounding violates California's "all the time worked" mandate. Review granted; Camp can be cited only as persuasive authority during review. Woodworth v. Loma Linda (2023) extended this; also held grant-and-hold pending Camp.
• Meal-period rounding (Donohue v. AMN Services, 2021): California Supreme Court held rounding does NOT apply to meal periods. Time records showing noncompliant meal periods now raise a rebuttable presumption of meal-period violations. See the meal and rest break laws guide for the §226.7 premium-pay cascade.
• Oregon: rounding effectively prohibited post-Eisele v. Home Depot, 643 F. Supp. 3d 1166 (D. Or. 2022). BOLI guidance hasn't formally moved, but the federal district court has, and practitioners advise clients to stop.
• Multi-state employers: rounding compliance follows the employee's work location. A Texas-headquartered company with a California-based remote employee owes that employee exact-time treatment, regardless of how the rest of the workforce is paid.

The 5 Most Expensive Rounding Mistakes

The patterns that drive litigation. Each has produced multi-million-dollar settlements or named-class judgments.

1. Rounding when the system can capture exact time (the Camp trap, California). Camp v. Home Depot U.S.A., 84 Cal. App. 5th 638 (Cal. Ct. App. 2022), held that summary judgment for Home Depot on neutral quarter-hour rounding had to be reversed: "If an employer, as in this case, can capture and has captured the exact amount of time an employee has worked during a shift, the employer must pay the employee for 'all the time' worked." Plaintiff Delmer Camp had been short-paid by 470 minutes (~7.8 hours) over the class period. The California Supreme Court granted review in February 2023 (S277518). Until the Court decides, Camp is persuasive-only authority — but every modern timekeeping system captures exact minutes, which is why most California employer-side practitioners stopped rounding the day Camp came down.

   Cited cases

   • See's Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012)
     California Court of Appeal — Adopted federal §785.48(b) rounding standard as California law
   • AHMC Healthcare, Inc. v. Superior Court, 24 Cal. App. 5th 1014 (2018)
     California Court of Appeal — Net-positive across the workforce satisfies neutrality — high-water mark for employer defense
   • Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021)
     California Supreme Court — Rounding does NOT apply to meal periods; rebuttable presumption of meal-period violations
   • Camp v. Home Depot U.S.A., Inc., 84 Cal. App. 5th 638 (2022)
     California Court of Appeal — Rounding impermissible when exact-time capture exists — review pending at Cal. Supreme Court (S277518)
   • Woodworth v. Loma Linda University Medical Center, 93 Cal. App. 5th 1038 (2023)
     California Court of Appeal — Extended Camp to 6-min rounding — review granted, held pending Camp (S281717)

2. Meal-period rounding in California (Donohue). Donohue v. AMN Services, 11 Cal. 5th 58 (2021), held that rounding does NOT apply to meal periods. AMN's 10-minute meal-period rounding system was facially neutral and net-positive across the workforce under the See's Candy/AHMC standard. The California Supreme Court rejected it anyway: the §512 and Wage Order §11 meal-period thresholds (30 minutes minimum, starting before the 5th hour) are precise statutory mandates, and rounding introduces precisely the kind of imprecision the statute is designed to prevent. The decision also created a rebuttable presumption of meal-period violations whenever time records show noncompliant breaks — flipping the summary-judgment burden to employers.

3. Grace-period work that turns out to be real work. §785.48(a) permits the "grace period" pattern — employees can clock in before scheduled start (or out after scheduled end) and the system pays only the scheduled time — but ONLY if the employee performs no work during the early/late period. In practice, grace-period systems routinely fail: employees set up registers, boot computers, don gear, read email, prepare workspaces. Both Corbin (9th Cir.) and See's Candy addressed this; the defenses live or die on whether the employer can prove employees DIDN'T work during the grace window. Most can't. Combined with Troester's no-de-minimis rule in California, the grace period is functionally dead for any work-adjacent activity.

4. Auto-deduction without functional exception procedures. White v. Baptist Memorial Health Care Corp., 699 F.3d 869 (6th Cir. 2012), is the leading federal case on meal-period auto-deduct: a hospital that automatically deducts 30 minutes per shift escapes liability ONLY if (a) employees know how to report missed breaks, (b) the procedure works in practice, AND (c) the specific employee didn't use it. In California, post-Donohue, auto-deduction is functionally banned the same way rounding is — the systematic exactly-30-minute deduction triggers the Donohue rebuttable presumption. Most California employers have switched to attestation-based break capture.

5. The recordkeeping cascade — Mt. Clemens exposure. 29 CFR §516.2(a)(7) requires recording "hours worked each workday and total hours worked each workweek." A rounded total is NOT the actual hours worked. The raw punches must be preserved as the source-of-truth; the rounded total is derived for payroll. Many systems retain only the rounded total, purging raw punches after payroll close. When a class action lands three years later, the employer can't prove what the actual hours were — and under Anderson v. Mt. Clemens Pottery, 328 U.S. 680 (1946), the employee can establish unpaid hours by "just and reasonable inference" with the burden shifted to the employer. Without raw punches, the employer almost always loses. The substantive rounding claim might be worth $50/employee; the recordkeeping failure turns it into $500/employee. Exact-time capture (the post-Camp California requirement) also makes buddy punching detection more precise — anomalous punch patterns (two employees clocking in at the same exact second, geographically impossible punches) are more identifiable when every minute lives in the record.

Federal Baseline: 29 CFR §785.48(b)

The DOL's rounding regulation, promulgated when mechanical time clocks were standard:

"It has been found that in some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees' starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work. 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."

Three operative elements:

1. Permitted increments. Nearest 5 minutes, 6 minutes (one-tenth of an hour), or 15 minutes (quarter hour). Nothing larger.
2. For enforcement purposes. The regulation is framed as administrative tolerance — not a substantive employer right to round.
3. The neutrality requirement. Rounding cannot, "over a period of time," fail to compensate for all actual time worked. Federal courts have read this as a two-part test: neutral on its face AND neutral in actual application.

The "7-minute rule" / quarter-hour rounding

The traditional convention is a 7-minute/8-minute split at each quarter hour:

The math is symmetric only if employees punch evenly across the 15-minute window. They don't — early punches cluster at start of shift, late punches at end. This is why "neutral on its face" alone is not enough; courts also examine neutrality in actual application across the workforce and over time. The 7/8 split is convention, not statute — DOL guidance references it without enacting it.

Corbin v. Time Warner — the leading federal case

Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership, 821 F.3d 1069 (9th Cir. 2016), is the controlling federal appellate authority approving neutral rounding. A call-center employee claimed Time Warner's quarter-hour rounding policy under-compensated him by $15.02 over his employment. The 9th Circuit affirmed summary judgment for the employer: the rounding policy was neutral on its face (rounded ALL punches to the nearest quarter without regard to who benefited), neutral as applied (the electronic system rounded mechanically without manager discretion), and the employee's individual loss did not defeat neutrality. The court rejected the argument that an employer must "un-round" each pay period — calling that obligation "a mini actuarial process at the time of payroll [that] would defeat the purpose of rounding altogether."

The California Chain

Four cases over twelve years. The line that has narrowed rounding from a permissive default to a doctrine on life support.

See's Candy Shops v. Superior Court, 210 Cal. App. 4th 889 (2012)

The first California appellate decision adopting the federal §785.48(b) rounding standard. The California Court of Appeal held rounding is permissible under California law if the policy is "fair and neutral on its face" AND "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 California Supreme Court denied both petition for review and petition to depublish in February 2013, allowing the opinion to stand. This was the operative California floor from 2012 through 2021.

AHMC Healthcare v. Superior Court, 24 Cal. App. 5th 1014 (2018)

Reaffirming See's Candy in the hospital context. AHMC operated two hospitals using quarter-hour rounding; an audit across both facilities showed roughly half of employees gained time and half lost time, with the workforce as a whole netting a gain. The two named plaintiffs each individually lost time, but the court held that individual loss does not defeat neutrality so long as the policy produces a net benefit (or neutrality) across the workforce as a group. This was the high-water mark for employer-favorable rounding in California.

Donohue v. AMN Services, 11 Cal. 5th 58 (2021)

The first California Supreme Court decision in the chain — and the first to narrow rather than confirm. AMN's "Team Time" system rounded meal-period punches to the nearest 10-minute increment. A nurse who took a 28-minute break would be recorded as 30 minutes; a nurse who started a break 5 minutes late could be recorded as on time. Facially neutral, net-positive across the workforce.

Held: rounding does NOT apply to meal periods. The §512 and Wage Order §11 thresholds are precise statutory mandates, and a rounding rule that introduces ±5-minute imprecision is at odds with the statute's precision. The decision also created a rebuttable presumption of meal-period violations whenever time records show noncompliant breaks, including at the summary-judgment stage. Employers can rebut by showing the employee voluntarily skipped, shortened, or delayed the break — but the burden flips to the employer.

The Court included pointed dicta on rounding generally: as technology evolves, the practical advantages of rounding policies may diminish. The signal that doctrine was ripe for further narrowing was unmistakable. The California Court of Appeal picked it up the next year.

Camp v. Home Depot U.S.A., 84 Cal. App. 5th 638 (2022)

The load-bearing case. Delmer Camp worked for Home Depot for about 4.5 years; Home Depot's electronic timekeeping system recorded clock-ins and clock-outs to the minute, then rounded to the nearest quarter hour for payroll. Camp's records showed he had been short-paid by 470 minutes over the class period (~7.8 hours). Home Depot demonstrated facial and applied neutrality under See's Candy/AHMC.

Held: summary judgment for Home Depot was reversed. "If an employer, as in this case, can capture and has captured the exact amount of time an employee has worked during a shift, the employer must pay the employee for 'all the time' worked." The court combined Troester v. Starbucks (rejecting federal de minimis for California claims) and Donohue (rejecting rounding for meal periods) to conclude that California's "all the time worked" mandate cannot be satisfied by intentional rounding when exact-time data exists.

The court explicitly limited the holding to cases where the employer's system DOES capture exact time. But the practical effect on California employers is sweeping: every modern electronic timekeeping system captures exact time.

The California Supreme Court granted review in February 2023 (S277518); briefing was complete in September 2023. As of 2026-05-23, Camp remains on the Court's official "Issues Pending before the California Supreme Court in Civil Cases" list with no decision issued and no oral argument scheduled. Under California Rules of Court 8.1115(e)(1), Camp can be cited only as persuasive authority during review — not as binding precedent. The Court's resolution will determine whether See's Candy survives in any form or is fully overruled.

Woodworth v. Loma Linda University Medical Center, 93 Cal. App. 5th 1038 (2023)

The Fourth District Court of Appeal extended Camp in July 2023. Loma Linda used a tenth-of-an-hour (6-minute) rounding policy — the SMALLEST increment permitted under §785.48(b). The court held that even at six minutes, rounding fails California's "all the time worked" standard when exact-time data exists. The California Supreme Court granted review November 1, 2023 (S281717) and ordered Woodworth held pending Camp. Same persuasive-authority-only posture during review.

What "pending" means in practice

Practical guidance during the Camp pendency: every California employer-side counsel I'm aware of treats Camp's holding as the operative rule, even though it's persuasive-only authority. The reasoning is straightforward — the California Supreme Court will either affirm (current Court of Appeal holding becomes binding statewide), modify (likely toward Camp's reasoning given Donohue's dicta), or reverse. Continuing to round in California while review is pending is a bet that the Supreme Court will reverse — a bet most counsel won't take given the Donohue signal.

Things California Employers Consistently Miss

• The exception isn't size, it's exactness. Woodworth closed the question of whether a smaller rounding increment (6 minutes — the smallest §785.48(b) permits) survives in California. It doesn't. The test isn't "how big is the round?" but "did the system capture exact time?" Every increment fails when exact data is available.
• Net-positive across the workforce is no longer enough. AHMC's aggregate-neutrality defense survives ONLY for the vanishing population of employers whose systems can't capture exact time. For everyone with a modern system, Camp governs.
• Auto-deduction of meal periods is rounding-by-another-name. A systematic exactly-30-minute deduction triggers Donohue's rebuttable presumption. California courts treat the practice as the same problem in different clothing.
• Raw punches must be preserved, even if you pay on rounded totals. §516.2(a)(7) requires the actual hours-worked record. Many timekeeping systems purge raw punches after payroll close. When the class action arrives, the employer can't prove its case — see the Mt. Clemens cascade below.
• The grace-period defense requires affirmative proof of no work. Both Corbin and See's Candy permitted grace periods only when the employer could prove employees didn't work during the early/late window. Most employers can't — pre-shift system logins, register setup, and gear donning all qualify as work under Troester.

State-by-State Survey

Outside California (and now Oregon), all states default to the federal §785.48(b) rule. The handful of state-specific notes below cover what's there; everywhere else, the federal floor controls.

Oregon is the second-state mover. Eisele v. Home Depot U.S.A., Inc., 643 F. Supp. 3d 1166 (D. Or. 2022), held that time-clock rounding is not permitted under Oregon wage law. The court allowed Home Depot to escape willfulness penalties because pre-2022 BOLI guidance had condoned rounding and the law was sufficiently uncertain at the time. Going forward, that uncertainty defense is foreclosed. BOLI has not yet formally updated its written guidance, but Oregon practitioners advise clients to stop rounding.

Auto-Deduction (Meal-Period) — Adjacent but Distinct

Many employers automatically deduct 30 minutes per shift for unpaid meal periods without verifying the break was actually taken. The federal floor (White v. Baptist Memorial Health Care Corp., 699 F.3d 869 (6th Cir. 2012)) permits auto-deduction IF the employer has reasonable procedures for employees to flag missed breaks AND those procedures function in practice.

After Donohue v. AMN, auto-deduction in California faces the same precision problem as rounding in the meal-period context. Time records showing every shift with an exact 30-minute deduct will trigger Donohue's rebuttable presumption of meal-period violations. California employers have largely abandoned auto-deduct in favor of attestation-based capture — the employee punches at break start and end; the system raises an alert if the recorded break is short or late.

The distinction matters for vendor configuration: timekeeping platforms typically offer both "auto-deduct meal" and "round to nearest tenth" as configuration options. In California, both are now operational liabilities even where individually defensible under federal law. The cluster moves together.

The Grace-Period Trap

A related but distinct §785.48(a) practice: employees can clock in before the scheduled start (or out after scheduled end) and the system pays only scheduled time. The federal authority allows this — but ONLY if the employee performs NO work during the early/late period.

In practice, grace-period systems routinely fail because employees DO work during the grace window: setting up registers, booting computers, donning gear, reading email, preparing the workspace. Both Corbin and See's Candy addressed grace-period claims:

• Corbin rejected the grace-period claim on summary judgment where the employee couldn't produce evidence of actual pre-shift work.
• See's Candy held the grace period was permissible where the company affirmatively prohibited pre-shift work and produced evidence of enforcement.

The pattern is consistent: grace-period defenses live or die on whether the employer can prove employees DIDN'T work during the grace window. Combined with Troester v. Starbucks (California's no-de-minimis rule), the grace period is functionally dead in California for any work-adjacent activity. See the off-the-clock work guide for the broader pre/post-shift framework.

Recordkeeping Cascade — Mt. Clemens Exposure

The trap most rounding employers miss: 29 CFR §516.2(a)(7) requires recording "hours worked each workday and total hours worked each workweek." A rounded total is not the actual hours worked. The raw punches must be preserved as the source-of-truth record; the rounded total is the derived payroll figure.

The federal retention windows:

• Payroll records: 3 years (29 CFR §516.5) — the derived figures, including the rounded totals, the regular and overtime rates, and the pay-period dates.
• Underlying time records: 2 years (29 CFR §516.6) — the source-of-truth raw punches, work schedules, and wage-rate tables.

Many timekeeping systems are configured to retain ONLY the rounded total, with raw punches purged after payroll close. The vendor's "data retention" setting defaults to whatever the cheapest storage tier supports; raw punches are often the first records to age out. When a class action lands three years later, the employer cannot prove what the actual hours were.

Under Anderson v. Mt. Clemens Pottery, 328 U.S. 680 (1946), the employee can establish unpaid hours by "just and reasonable inference" with the burden shifted to the employer to disprove the inference. Without raw punches, that burden is functionally impossible to meet. The substantive rounding claim might be worth $50 per employee; the inability to prove it wrong turns it into $500 per employee. Aggregate over 50,000 workers and a 4-year class period and the exposure is real — the Utne settlement at $72.5M for ~272,000 California employees is the recent baseline.

The defensive posture is mechanical: configure the timekeeping system to retain raw punches for the longer of the two windows (3 years) regardless of what gets paid on. Storage is cheap; the alternative is the Utne valuation curve. See our recordkeeping requirements guide for the full §516 framework, the federal layered statutes (IRC 4 yr, ERISA 6 yr, OSHA 5 yr), and the multi-state retention rules (NY/HI 6 yr) that often pull the effective retention window past the 3-year FLSA floor.

Operational Alternatives in 2026

What systems do instead of rounding. The DOL's de facto position in enforcement: exact-time capture is the safe harbor. Rounding is permitted as administrative tolerance but brings audit and litigation exposure in proportion to the size of the workforce.

1. Exact-time capture. Punches recorded to the second or minute; payroll computes wages on the exact captured time. Federal safe harbor and California functional requirement post-Camp. The marginal payroll cost is usually small — California audits routinely show the workforce nets a few minutes per shift under rounding, meaning exact-time pay marginally increases the payroll bill. The elimination of class-action exposure dwarfs that increase.
2. Attestation workflow. At clock-out, the employee attests that recorded times are accurate and that meal/rest breaks were taken as scheduled. Creates a defensible record against later off-the-clock claims and, in California, satisfies the Donohue "rebut the rebuttable presumption" requirement for meal-period compliance.
3. Edit logs. Any post-hoc change to a punch is logged with timestamp, editor identity, and reason. Mitigates Mt. Clemens burden-shifting when an employee alleges manipulation — the employer can affirmatively show what changed, when, and why.
4. Supervisor approval workflows. Punches outside expected windows (early clock-in, late clock-out, missed punches) route to a supervisor for review before payroll close. Catches the grace-period work problem at the source: if employees are routinely punching in 15 minutes early, the supervisor either pays for the time or stops the behavior.
5. Geofencing and device-binding. For mobile or field workforces, GPS-bounded punches prevent off-site clock-in and create location records that defend against both off-the-clock claims AND off-premises-rounding claims.

Most major timekeeping platforms support exact-time capture as a configuration option, often as the default for new accounts. The configuration that creates exposure is usually a legacy choice carried forward from the pre-Camp era — California-headquartered employers configured for quarter-hour rounding in 2014 and never revisited.

Multi-State and Remote Workers

Rounding compliance follows the employee's work location, not the employer's HQ. Same rule as the rest of the wage-hour cluster.

• A California-resident remote employee of a Texas company is subject to Camp/Donohue — exact-time treatment required; no rounding for meal periods.
• A New York-resident remote employee of a California company follows federal §785.48(b) plus any New York-specific guidance.
• A traveling field employee follows the rule of the state where the work is performed each day.

The practical implication: any employer with California workers (resident OR remote-into-CA) must configure timekeeping to capture exact time and pay on exact time for those employees, regardless of how the rest of the workforce is paid. Most national employers have responded either by running California on a separate exact-time config, or by eliminating rounding company-wide as a single consistent policy. The latter is the strict-everywhere recipe that recurs across overtime, breaks, and off-the-clock work — it eliminates per-state config complexity and removes the recordkeeping-failure mode that produces the Mt. Clemens cascade.

Recent Changes (2024–2026)

• Utne v. Home Depot settlement (2024). $72.5M settlement covering ~272,000 California workers since March 2012. The settlement covers three claim classes — approximately 41% off-the-clock pre-shift prep, 50% closing-shift waiting time, and 9% the rounding sub-class. The rounding piece alone is several million dollars; the bundled valuation reflects how rounding claims travel together with off-the-clock and recordkeeping claims in California class actions.
• Camp v. Home Depot (pending). California Supreme Court granted review February 2023; briefing complete September 2023. Still on the Court's official "Issues Pending before the California Supreme Court in Civil Cases" list as of April 2026. No decision issued, no oral argument scheduled per secondary tracking through 2026. The Court's resolution will determine whether See's Candy survives in any form.
• Woodworth v. Loma Linda (pending). California Supreme Court granted review November 2023, held pending Camp.
• Eisele v. Home Depot, Oregon (D. Or. 2022). Federal district court held time-clock rounding unlawful under Oregon wage law. Oregon is the first state outside California where rounding is materially restricted by a court holding.
• No federal regulatory change. DOL has not amended §785.48(b) under either the Biden or current administration. Current WHD enforcement priorities center on overtime violations, child labor, and H-1B compliance — rounding is not on the announced enforcement agenda for 2026.
• No California legislative codification. The 2024–2025 California session closed October 2025 with no bill specifically codifying or restricting time-clock rounding. The doctrine continues to develop through case law, not statute.

Frequently Asked Questions

If You Discover You've Been Rounding Wrong

The unwinding playbook when an audit (internal or plaintiff-driven) reveals exposure:

1. Audit by employee work location, not employer location. Pull time records for the FLSA statute period (2 years; 3 if willful) and any longer state period (4 years under California's Unfair Competition Law). For California employees, the Camp-era exposure goes back to roughly October 2022 even though Camp itself is persuasive-only.

2. Verify your system preserves raw punches. Open the timekeeping configuration and confirm that pre-rounding clock-in/out times are retained for at least the federal §516 record-retention windows (3 years for payroll records, 2 years for the underlying time records). If raw punches are purged, you have a Mt. Clemens problem regardless of whether the rounding itself was lawful.

3. Quantify the exposure. Compute the difference between (raw punch total × wage rate) and (rounded total × wage rate) for each affected employee across the class period. For California employees, treat this as the floor — the §203 waiting-time penalty cascade on top can multiply the per-employee exposure significantly for terminated employees.

4. Pay corrective wages voluntarily. Self-correcting before a claim is filed is admissible as good-faith evidence and, for California §226 derivative claims, is what supports the post-2024 Naranjo good-faith defense — see our pay stub requirements by state guide for the §226 derivative-claim framework and the four-statute cascade. Voluntary payment can also eliminate the §203 waiting-time multiplier for former employees who receive back wages.

5. Switch to exact-time capture for California (or company-wide). The DOL's de facto safe harbor is exact-time-paid time. For California, the operational requirement is the same. Most national employers have moved company-wide rather than maintaining two configurations; the per-state config complexity is rarely worth the marginal payroll savings rounding produces.

6. Consult counsel for class-action exposure. Rough rule: more than 10 California employees subjected to a uniform rounding policy, or any systematic auto-deduction policy without functional exception procedures, crosses into class-action territory. The Utne settlement valuation ($72.5M for ~272,000 employees, rounding portion ~9%) is the recent California baseline.

The Through-Line

Rounding is a 1961 accommodation for paper time cards. The regulation that permits it (29 CFR §785.48(b)) was written when mechanical time clocks couldn't reliably record to the minute and a 7/8 split was the operational reality. That reality no longer exists. Every modern timekeeping system captures exact time, and the regulatory premise — "presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work" — has been falsified at the workforce scale: AHMC's audit showed roughly half of employees gain and half lose, and Camp's plaintiff was short-paid 470 minutes against a system that COULD have paid him to the minute.

California courts have caught up with the technology. The federal regulation has not. The result is a real and growing federal/California divergence, with Oregon as the second-state mover. Camp's pending review at the California Supreme Court will determine whether See's Candy survives in any form — but the direction of travel is one-way, signaled by Donohue's dicta in 2021 and confirmed by Woodworth's extension to 6-minute increments in 2023.

The defense is mechanical: capture every minute, preserve the raw punches for the longer of the §516 retention windows (3 years), pay on the actual time. The marginal payroll cost is small. The elimination of class-action exposure and the Mt. Clemens recordkeeping cascade is large. For multi-state employers, standardize to exact-time everywhere; the per-state configuration that rounds in 49 states and runs exact-time in California is the complexity that makes a class-action defense expensive. The settlements are catching up — Utne's $72.5M California class is the recent baseline, not the ceiling.

Sources and Authorities

Federal

• 29 CFR §785.48 — Use of time clocks (eCFR canonical)
• 29 CFR §785.48 — Cornell LII mirror
• 29 CFR §785.47 — De minimis doctrine
• 29 CFR §516.2 — Records to be kept by employers
• DOL Field Operations Handbook Chapter 31

California

• Cal. Lab. Code §510 (overtime / hours)
• Cal. Lab. Code §512 (meal periods)
• California Supreme Court "Issues Pending" list (April 10, 2026) — confirms Camp still pending

Case law

• Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) — recordkeeping burden-shifting.
• East v. Bullock's, Inc., 34 F. Supp. 2d 1176 (D. Ariz. 1998) — early §785.48(b) summary-judgment baseline.
• White v. Baptist Memorial Health Care Corp., 699 F.3d 869 (6th Cir. 2012) — auto-deduction lawful with functional exception procedures.
• See's Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (Cal. Ct. App. 2012) — California adoption of federal §785.48(b) standard.
• Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership, 821 F.3d 1069 (9th Cir. 2016) — neutral quarter-hour rounding lawful under FLSA.
• Troester v. Starbucks Corp., 5 Cal. 5th 829 (2018) — California rejects federal de minimis doctrine; the doctrinal predicate for Camp.
• AHMC Healthcare, Inc. v. Superior Court, 24 Cal. App. 5th 1014 (Cal. Ct. App. 2018) — net-positive workforce defense; high-water mark for employer-favorable rounding in California.
• Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021) — rounding does NOT apply to meal periods; rebuttable presumption of meal-period violations.
• Camp v. Home Depot U.S.A., Inc., 84 Cal. App. 5th 638 (Cal. Ct. App. 2022) — rounding impermissible when exact-time capture exists. California Supreme Court review pending (S277518).
• Eisele v. Home Depot U.S.A., Inc., 643 F. Supp. 3d 1166 (D. Or. 2022) — rounding not permitted under Oregon wage law.
• Woodworth v. Loma Linda University Medical Center, 93 Cal. App. 5th 1038 (Cal. Ct. App. 2023) — extending Camp; review granted, held pending Camp (S281717).

Settlements

• Utne v. Home Depot — $72.5M California class settlement, Bloomberg Law coverage
• Utne v. Home Depot — settlement administrator
• Frlekin v. Apple — $29.9M California bag-check settlement, HR Dive coverage