Case 1: Donovan v. Williams Chemical Co. (8th Cir. 1982)
The facts: Williams Chemical rounded all employee time downward to the nearest quarter-hour — never up. Aggregate balance was structurally negative.
The ruling: Per-se non-compliant. Asymmetric rounding cannot satisfy the FLSA requirement that pay average out over time.
The takeaway: Rounding direction must be neutral. “Round down to the next 15” is wage theft. The Eighth Circuit’s decision is now cited as the foundational case for FLSA rounding compliance.
Case 2: See’s Candy Shops, Inc. v. Superior Court (Cal. App. 2012)
The facts: See’s rounded timecards to the nearest 6 minutes (tenths). Plaintiffs argued California labor law required exact-minute payment despite federal FLSA permitting rounding.
The ruling: California adopted the FLSA approach. Rounding is permitted in CA if neutral over time. This was the controlling CA precedent for over a decade.
The takeaway: For 12 years, See’s Candy let CA employers continue legacy rounding. The protection ended in 2024 (see Case 5).
Case 3: Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership (9th Cir. 2016)
The facts: Time Warner used neutral quarter-hour rounding. Plaintiff argued that any rounding caused individual under-payment, even if aggregate balance was zero.
The ruling: Aggregate balancing is sufficient under the FLSA. Individual under-payments don’t void the policy if the system as a whole averages out.
The takeaway: Federal courts allowed aggregate balancing as a defense — making rounding policies easier to defend if the math worked at scale.
Case 4: Donohue v. AMN Services, LLC (Cal. 2021)
The facts: AMN rounded meal-period start and end times to the nearest 10 minutes. Plaintiffs argued this violated California meal-break requirements (which mandate a 30-minute uninterrupted meal period).
The ruling: The California Supreme Court rejected meal-period rounding entirely. Meal periods must be tracked to the exact minute because the legal protection (30 minutes uninterrupted) requires precise verification.
The takeaway: Rounding can’t be applied to time entries that are themselves the basis for legal compliance. After Donohue, meal-break audits in CA exploded.
Case 5: Camp v. Home Depot U.S.A., Inc. (Cal. 2024)
The facts: Home Depot rounded employee time to the nearest 15 minutes using a neutral algorithm. Plaintiff was “net negative” on aggregate over multiple years — rounding shaved his time, even though Home Depot argued the policy was neutral company-wide.
The ruling: The California Supreme Court held that, where electronic timekeeping captures exact minutes, employers cannot round individual employee time downward. The court explicitly questioned See’s Candy’s continued vitality and invited the legislature to clarify.
The takeaway: Rounding in California is effectively dead for employers with modern timekeeping. The decision triggered a wave of class actions in 2024–2025 and continues to drive policy changes.
Case 6: Pierre v. Wal-Mart Stores (settled, 2019)
The facts: Wal-Mart used neutral quarter-hour rounding. Plaintiffs alleged that store managers expected employees to be on the floor at shift start, creating unpaid pre-shift work.
The settlement: $65 million class settlement covering hourly associates. The case never reached final ruling on the rounding policy itself, but Wal-Mart later moved to exact-minute timekeeping company-wide.
The takeaway: Even “neutral” rounding becomes a liability if combined with operational expectations that produce systematic under-counting. The pre-shift expectation is the weak link.
The pattern
Reading the cases as a body, the legal trajectory is clear:
- 1982: Asymmetric rounding (always down) is illegal.
- 2012: Symmetric rounding is OK, including in CA.
- 2016: Aggregate balancing is a sufficient defense at the federal level.
- 2021: Meal-period rounding banned in CA.
- 2024: Rounding effectively banned in CA where exact tracking is feasible.
The arc bends toward exact-minute timekeeping as technology makes it cheap and as plaintiffs’ firms develop better statistical analysis.
What to do if you’re currently rounding
- Audit aggregate balance. If consistently negative, fix or stop.
- Audit by individual. If individual employees are net-negative, you may be exposed even with a balanced aggregate (post-Camp).
- Audit the work-flow. Are employees doing uncompensated pre-shift or post-shift work? Train supervisors to enforce zero-pre-shift policy.
- For CA-based work: migrate to exact-minute now, before you’re named in a class action.
- For other jurisdictions: consider migrating, especially if you have modern timekeeping infrastructure.
If you’re an employee
Compare your raw clock-in/out punches to your paystub hours using our payroll time converter with the “Exact” rounding setting. If there’s a consistent gap, ask payroll which rounding rule is in effect — you have a legal right to know. If the rule isn’t neutrally applied or you’re losing time consistently, consult an employment lawyer (most offer free initial consults for wage-and-hour claims).
