Filed 6/25/18

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

AHMC HEALTHCARE, INC. et 

al.,

Petitioners,

v.

THE SUPERIOR COURT OF 

LOS ANGELES COUNTY,

Respondent;

EMILIO LETONA et al., 

Real Parties in Interest.

 B285655

 (Los Angeles County

 Super. Ct. No. BC629297)

 

 

ORIGINAL PROCEEDINGS in mandate. Elihu M. Berle, Judge. 

Petition granted.

Ballard Rosenberg Golper & Savitt, Jeffrey P. Fuchsman and 

Zareh A. Jaltorossian for Petitioners.

Law Offices of Kevin T. Barnes, Kevin T. Barnes and Gregg 

Lander; Davtyan Professional Law Corporation and Emil Davtyan; 
Blumenthal, Nordrehaug & Bhowmik, Norman B. Blumenthal, Kyle R. 

Nordrehaug and Aparajit Bhowmik for Real Parties in Interest.

No appearance for Respondent.

_______________________________________

State law requires employers to pay their employees for all time 

the employees are at work and subject to the employers’ control. 

(Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833, 839.) 

The issue in this case is whether an employer’s use of a payroll system 

that automatically rounds employee time up or down to the nearest 

quarter hour, and thus provides a less than exact measure of employee

work time, violates California law. In the underlying matter, both 

employers and employees moved for summary adjudication on the issue, 

and the trial court denied both motions. Petitioners AHMC Healthcare, 

Inc., AHMC, Inc., AHMC Anaheim Regional Medical Center, L.P. 

(Anaheim), and AHMC San Gabriel Valley Medical Center, L.P. (San 

Gabriel) sought a writ of mandate directing the trial court to grant its 

motion, contending they had established as a matter of undisputed fact 

that their system was neutral on its face and as applied. We agree the 

undisputed facts established that petitioners’ system was in compliance 

with California law. Accordingly, we grant the writ.

FACTUAL AND PROCEDURAL BACKGROUND

Real parties Emilio Letona and Jacquelyn Abeyta, acting on 

behalf of themselves and others similarly situated, brought suit against 

petitioners for failure to pay wages, failure to provide meal periods, 

failure to provide rest periods, failure to furnish timely and accurate 

wage statements, failure to pay wages to discharged employees, and 

unfair business practices. The operative complaint also sought 

penalties under the Private Attorneys General Act (Lab. Code, § 2698 et 

seq.). 

2
Real party Letona was employed by San Gabriel as a part-time

respiratory care technician from 2009 to 2016. Real party Abeyta was 

employed by Anaheim as an R.N. from November 2015 to August 2016. 

Both real parties were employed in hourly positions, requiring them to 

clock in and out, which they did by swiping their ID badges at the 

beginning and end of their shifts. Real parties’ primary contention was 

that petitioners’ method of calculating employee hours violated the 

Labor Code because the system rounded employees’ hours up or down to 

the nearest quarter hour prior to calculating wages and issuing 

paychecks, rather than using the employees’ exact check-in and checkout times.1 Both sides moved for summary adjudication to establish

whether petitioners’ method of calculation passed muster under 

California law.2 

1 The original plaintiff was Ernesto Fajardo, an R.N. employed by AHMC 

Garfield Medical Center, L.P. However, as it was determined that Fajardo’s 

hours and wages had been increased as a result of the rounding procedures, 

he was substituted out for Letona and Abeyta. AHMC Garfield Medical 

Center L.P., AHMC Monterey Park Hospital, L.P., AHMC Greater El Monte 

Community Hospital, L.P. and AHMC Whittier Hospital Medical Center, L.P. 

were named as defendants in the original complaint, but dismissed when the 

complaint was amended. Real parties acknowledged that the evidence did 

not show that employees at these medical facilities were undercompensated 

by the rounding system. 

2 The trial court has not yet decided whether to certify the proposed 

class. It is well settled that “trial courts . . . should decide whether a class is 

proper and, if so, order class notice before ruling on the substantive merits of 

the action” in order to prevent “‘one-way intervention’” which occurs when 

potential plaintiffs “elect to stay in a class after favorable merits rulings but 

opt out after unfavorable ones.” (Fireside Bank v. Superior Court (2007) 40 

Cal.4th 1069, 1074.) The parties entered into a stipulation waiving this rule. 

In the stipulation, the parties asked the court to proceed under Code of Civil 

Procedure section 437c, subdivision (t), which permits the parties to stipulate 

to adjudication of “a legal issue or a claim for damages other than punitive 

damages that does not completely dispose of a cause of action, affirmative 

defense, or issue of duty . . . .”

3

 
The parties stipulated to the following facts. Petitioners have a 

policy that rounds employees’ time clock swipes up or down to the 

nearest quarter hour. For example, if an employee clocks in between 

6:53 and 7:07, he or she is paid as if he or she had clocked in at 7:00; if 

an employee clocks in from 7:23 to 7:37, he or she is paid as if he or she 

had clocked in at 7:30. In addition, meal breaks that last between 23 

and 37 minutes are rounded to 30 minutes. 

The time records for San Gabriel and Anaheim for the period 

August 2, 2012 through June 30, 2016 were examined by Deborah K. 

Foster, Ph. D., an economic and statistics expert. During this period, 

employee shifts totaled 527,472 at San Gabriel, and 766,573 at 

Anaheim. Dr. Foster examined the data over the four-year period from 

three perspectives: (1) the percentage of employees who gained by 

having minutes added to their time, compared to the percentage who 

lost by having minutes deducted; (2) the percentage of employee shifts 

in which time was rounded up, compared to the percentage in which 

time was rounded down; and (3) whether the employees as a whole 

benefitted by being paid for minutes or hours they did not work, or the 

petitioners benefitted by paying for fewer minutes or hours than 

actually worked. The parties stipulated to the accuracy of her findings, 

discussed below. 

At San Gabriel, petitioners’ rounding procedure added time (9,476 

hours) to the pay of 49.3% of the workforce (709 employees) and left 1.2

percent of the workforce (17 employees) unaffected; 49.5 percent of the 

workforce (713 employees) lost time (a total of 8,097 hours).3 On a dayby-day analysis, the procedure added time to 45.2 percent of the 

employee shifts, averaging 4.96 minutes per day; it reduced time from

43.3 percent of employee shifts, averaging 4.82 minutes per employee 

shift; it had no effect on 11.6 percent of employee shifts. Overall, the 

3 For those employees whose time was reduced, the average net 

reduction was 2.04 minutes per employee shift. 

4

 
number of minutes added to employee time by the rounding policy 

exceeded the number of minutes subtracted, adding 1,378 hours to the

employees’ total compensable time. 

At Anaheim, the rounding procedure added time (17,464 hours) to 

the pay of 47.1 percent of the workforce (861 employees), and had no 

effect on 0.8 percent of the workforce (14 employees); 52.1 percent of the 

workforce (953 employees) lost time (a total of 13,588 hours).4 On a 

day-by-day analysis, the procedure added time to 46.6 percent of the 

employee shifts examined, reduced time from 42.3 percent of the

employee shifts examined, and had no effect on 11 percent. Overall, the 

rounding policy added 3,875 hours to the employees’ total compensable 

time.5

The parties also stipulated to the net effect of rounding on the two 

named plaintiffs: over the nearly four-year period examined, Letona 

lost 3.7 hours, an average of .86 of a minute per shift, for a total dollar 

loss of $118.41. Abeyta, who worked at San Gabriel for only nine 

4 For those employees whose time was reduced, the average net 

reduction was 2.33 minutes per employee shift. 

5 The parties stipulated that the two medical facilities should be 

considered separately. Nonetheless, petitioners combined the figures for 

certain purposes, and sometimes referred to the combined figures in their 

argument. Although real parties asked the court to disregard the combined 

figures, they too referred to them in their argument. To clarify the record, we 

note that according to the parties, combining the San Gabriel and Anaheim 

figures leads to the following results: for the 1,294,045 total employee shifts 

at the two facilities; 26,938 hours were added to the time of 1,568 employees 

(48% of the combined total number of employees); 21,685 hours were taken 

from 1,666 employees (51% of the combined total number of employees); there 

was no effect on 31 employees (0.9% of the combined total number of 

employees). The effect of the rounding procedure on San Gabriel and 

Anaheim employees combined was a net increase of 5,254 in compensated 

hours. 

5

 
months during the examined period, lost 1.6 hours, an average of 1.85 

minutes per shift, for a total dollar loss of $63.70.

Based on these facts, petitioners contended the rounding 

procedure was lawful, as it was facially neutral, applied fairly, and 

provided a net benefit to employees considered as a whole. As proof of 

its tilt toward employees, petitioners pointed to the stipulated facts that 

at both facilities, the majority of employee shifts either had time added 

or were unaffected, and the number of minutes added to employee time 

from rounding up exceeded the number of minutes subtracted from

rounding down. The result was a net loss to petitioners and net gain for 

their employees, who were paid for 1,378 additional hours at San 

Gabriel and 3,875 additional hours at Anaheim. Moreover, with respect 

to the employees who lost time, the total amount was small per 

employee, particularly when calculated on a daily basis. For example, 

Letona’s loss of 3.7 hours, worked out to less than a minute per shift. 

Abeyta’s loss of 1.6 hours worked out to less than two minutes per shift. 

Petitioners contended this negligible amount of lost time was not 

compensable, under a de minimis theory. 

Real parties opposed petitioners’ motion, and asked the court to 

grant summary adjudication in their favor on the rounding issue. They 

contended that an employer’s rounding practice is unlawful if it

systematically undercompensates employees, and that such systematic 

undercompensation occurs whenever “the average employee suffers a 

loss of income due to rounding.” According to real parties, petitioners’

rounding procedure was unlawful because it resulted in 

undercompensation for a slight majority of petitioners’ employees.6 

Real parties further maintained that a rounding policy that resulted in 

6 As we have seen, the majority of employees at San Gabriel did not lose 

any compensation as the result of rounding. Real parties used the combined 

numbers to support the argument that the majority of employees at 

petitioners’ facilities suffered a loss. 

6

 
any loss to any employee, no matter how minimal, violates California 

employment law. 

The trial court denied both petitioners’ and real parties’ motions 

for summary adjudication. At the hearing, the court explained that an 

employer may be permitted to use a rounding procedure “as long as [it] 

does not consistently result in a failure to pay employees per time 

worked,” and that “a rounding policy is lawful if it is fair and neutral on 

its face and it’s used in such a manner that would not result over a 

period of time in failure to compensate the employees properly for all 

the time that they have worked.” The court further explained that 

determining whether a rounding policy is slanted against employees “is 

a factual issue and not a legal one,” and that “the analysis turns on

whether the policy is used in such a manner that will not result over a 

period of time in failure to compensate employees properly for all the 

time that they’ve actually worked.” The court cited Shiferaw v. Sunrise 

Senior Living Mgmt., Inc. (C.D.Cal., Mar. 21, 2016, CV-13-02171-JAK 

(PLAx)) 2016 U.S. Dist. LEXIS 187548 (Shiferaw) for the proposition 

that “a plaintiff may establish [that] the employ[er]’s facially-neutral 

policy is unlawful using either a net effect approach or an employee 

percentage approach.” The court expressed concern that an employer 

could manipulate the system by “consistently overcompensat[ing]” low 

wage earners and “consistently overcompensat[ing]” “high wage 

earners” in order to “serve [the] company’s whims at the expense of the 

employees.” The court concluded that the evidence that 49.5 percent of 

the employees at San Gabriel and 52.1 percent of the employees at 

Anaheim had their hours reduced supported a finding that the rounding 

policy “consistently favored the employer.” Thus, the court concluded,

the evidence “raise[d] triable issues as to whether the rounding policies

systematically under-compensate employees.” 

Petitioners filed a petition for writ of mandate, seeking reversal of 

the order denying their motion for summary adjudication. On February 

8, 2018, this court issued an alternative writ of mandate, instructing 

7
the trial court either to vacate the order insofar as it denied petitioners’ 

motion and make a new and different order granting the motion or, in 

the alternative, to show cause why a peremptory writ of mandate 

should not issue. The trial court did not vacate its original order.

DISCUSSION

Section 785.48 of title 29 of the Code of Federal Regulations 

(section 785.48), promulgated many decades ago, allows employers to 

compute employee worktime by rounding “to the nearest 5 minutes, or 

to the nearest one-tenth or quarter of an hour,” provided that the 

rounding system adopted by the employer “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.” (29 

C.F.R. § 785.48(b).)7 Federal district courts interpreting the provision 

have almost universally concluded that a rounding system is valid if it

“average[s] out sufficiently,” rejecting claims that minor discrepancies 

in individual employee’s wage calculations establish that the employee 

is entitled to assert a claim for underpayment of wages. (East v. 

Bullock’s Inc. (D. Ariz. 1998) 34 F.Supp.2d 1176, 1184 [employee 

presented evidence of 24 occasions of time reductions of less than 15 

minutes]; accord, Alonzo v. Maximus, Inc. (C.D. Cal. 2011) 832 

F.Supp.2d 1122, 1126-1127 [“[A]n employer’s rounding practices comply 

with § 785.48(b) if the employer applies a consistent rounding policy 

that, on average, favors neither overpayment nor underpayment. . . . [¶] 

An employer’s rounding practices violate § 785.48(b) if they 

systematically undercompensate employees”]; Mendez v. H.J. Heinz Co., 

L.P. (C.D. Cal., Nov. 13, 2012, No. CV-12-5652-GHK (DTBx)) 2012 U.S. 

7 Section 785.48 is part of section 785, title 29 of the Code of Federal 

Regulations, the regulations that define “what constitutes working time” for 

purposes of determining whether employees are receiving the minimum wage 

or are entitled to overtime. (29 C.F.R., § 785.1.)

8

 
Dist. LEXIS 170785, p. *6 [“Rounding policies may be permissible if 

they, ‘on average, favor neither overpayment nor underpayment’ of 

wages”]; Eddings v. Health Net, Inc. (C.D. Cal., Mar. 23, 2012, Case No. 

CV-10-1744-JST (RZx)) 2012 U.S. Dist. LEXIS 51158, p. *11 (Eddings) 

[“[A]n employer’s rounding practices comply with § 785.48(b) if the 

employer applies a consistent rounding policy that, on average, favors 

neither overpayment nor underpayment”].)8

In Corbin v. Time Warner Entm’t-Advance/Newhouse P’ship. (9th 

Cir. 2016) 821 F.3d 1069 (Corbin), the first federal appellate court to 

interpret the regulation “join[ed] the consensus of district courts that 

have analyzed this issue . . . .” (Id. at p. 1079.) The plaintiff there had 

lost $15.02 in total compensation over a one-year period, and contended 

that “if an employee loses any compensation due to the operation of a 

company’s rounding policy, that policy should be found to violate the 

federal rounding regulation.” (Id. at pp. 1076-1077.) “In other words,

. . . unless every employee gains or breaks even over every pay period or 

set of pay periods analyzed, an employer’s rounding policy violate[s] the 

8 We note that in each of the above-cited cases, the federal courts applied 

section 785.48 to state law claims. (East v. Bullock’s, Inc., supra, 34 

F.Supp.2d at pp. 1183-1184 [Arizona law]; Alonzo v. Maximus, supra, 832 

F.Supp. at p. 1126 [California law]; Mendez v. H.J. Heinz Co., L.P., supra,

2012 U.S. Dist. LEXIS 170785 at p. *2 [California law]; Eddings v. Health 

Net, Inc., supra, 2012 U.S. Dist. LEXIS 51158 at p. *7 [California law].) 

Courts deciding claims asserted under the federal Fair Labor Standards Act 

have interpreted section 785.48 in the same manner. (See, e.g., Bustillos v. 

Board of County Commissioners of Hidalgo County (D.N.M., Oct. 20, 2015, 

No. CIV-13-0971 JB/GBW) 2015 U.S. Dist. LEXIS 162697, p. *66, affd. in 

pertinent part sub nom. Jimenez v. Board of County Commissioners of 

Hidalgo County (10th Cir. 2017) 697 Fed.Appx. 597 [“Employers may . . .

lawfully use rounding policies to record and compensate time, as long as the 

policy does not ‘consistently result[] in a failure to pay employees for time 

worked’”]; Sloan v. Renzenberger, Inc. (D. Kan., Apr. 15, 2011, No. 10-2508-

CM-JPO) 2011 U.S. Dist. LEXIS 41018, p. *8 [“[R]ounding is unlawful if it 

consistently results in a failure to pay employees for time worked”].)

9

 
federal rounding regulation . . . .” (Id. at p. 1077, italics omitted.) The 

Ninth Circuit rejected that contention for multiple reasons. First, the 

court observed, the plaintiff’s interpretation “read into the federal 

rounding regulation an ‘individual employee’ requirement that does not 

exist. The regulation instead explicitly notes that it applies to 

‘employees’ and contemplates wages for the time ‘they’ actually work.” 

(Ibid., quoting 29 C.F.R. § 785.48(b).) “If the rounding policy was meant 

to be applied individually to each employee to ensure that no employee 

ever lost a single cent over a pay period, the regulation would have said 

as much.” (Corbin, supra, at p. 1077.) 

The court further found that interpreting the regulation to require 

the rounding to work out neutrally for every employee “would undercut 

the purpose” and “gut the effectiveness” of the typical rounding policy. 

(Corbin, supra, 821 F.3d at p. 1077.) “Employers use rounding policies 

to calculate wages efficiently; sometimes, in any given pay period, 

employees come out ahead and sometimes they come out behind, but 

the policy is meant to average out in the long-term. If an employer’s

rounding practice does not permit both upward and downward 

rounding, then the system is not neutral . . . .” (Ibid.) The plaintiff’s 

interpretation “would require employers to engage in the very 

mathematical calculation that the federal rounding regulation serves to 

avoid,” requiring employers to “‘un-round’ every employee’s time stamps 

for every pay period to verify that the rounding policy had benefitted 

every employee.” (Ibid.) “The proper interpretation of the federal 

rounding regulation cannot be one that renders it entirely useless.” 

(Ibid.) 

Finally, the court expressed concern that the plaintiff’s 

interpretation of the regulation would “reward[] strategic pleading, 

permitting plaintiffs to selectively edit their relevant employment 

windows to include only pay periods in which they may have come out 

behind while chopping off pay periods in which they may have come out 

ahead.” (Corbin, supra, 821 F.3d at p. 1077.) The court did not believe 

10
that “the legality of an employer’s rounding policy” should “turn[] on the 

vagaries of clever pleading.” (Id. at p. 1078.) 

Applying its reasoning to the facts presented, the Corbin court 

found that the rounding policy at issue “passe[d] muster.” The policy 

was “facially neutral,” the court observed, as the employer “rounds all 

employee time punches to the nearest quarter-hour without an eye 

towards whether the employer or the employee is benefitting from the 

rounding.” (Corbin, supra, 821 F.3d at pp. 1078-1079.) Moreover, the 

plaintiff’s own compensation records demonstrated that the rounding 

policy was “neutral in application”: “sometimes [he] gained minutes 

and compensation, and sometimes [he] lost minutes and compensation.” 

Although the plaintiff was able to show an aggregate loss of $15.02, 

“[the] numbers . . . fluctuated from pay period to pay period, and . . . a 

few more pay periods of employment may have tilted the total 

time/compensation tally in the other direction . . . .” (Id. at p. 1079.)

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. 

(Bell v. Farmers Ins. Exchange (2001) 87 Cal.App.4th 805, 817; accord, 

Huntington Memorial Hospital v. Superior Court (2005) 131 

Cal.App.4th 893, 903.) In See’s Candy Shops, Inc. v. Superior Court

(2012) 210 Cal.App.4th 889, 903 (See’s I), the court agreed with the 

federal courts’ interpretation of section 785.48.9 There, See’s Candy 

9 Real parties do not dispute that section 785.48 is applicable to claims

made under state law. We note that California’s Division of Labor Standards 

Enforcement (DLSE) adopted the federal regulation in its Enforcement 

Policies and Interpretations Manual (DLSE Manual or Manual): “The 

Division utilizes the practice of the U.S. Department of Labor of ‘rounding’ 

employee’s hours to the nearest five minute, one-tenth or quarter hour for 

purposes of calculating the number of hours worked pursuant to certain 

restrictions.” (DLSE Manual (Revised, June 2002 Update), ¶ 47.1, 

“Rounding.”) The court in See’s I agreed with the DLSE and the federal 

courts in concluding that section 785.48 and the policies underlying it “apply 

11

 

(Fn. is continued on the next page.)
used a timekeeping system that automatically rounded employee 

punches up or down to the nearest tenth of an hour. (Id. at p. 892.) The 

plaintiff brought a class action for unpaid wages, and moved for 

summary adjudication that the rounding policy was inconsistent with 

federal and state law. (Id. at pp. 893-894.) The defense expert’s 

analysis showed that 59.1 percent of the affected employees had a net 

gain in time; 33 percent had a net loss; and 7.9 percent had no 

difference. (Id. at p. 896.) The plaintiff herself received a net benefit of 

five seconds per shift, but lost 3.6 seconds of overtime. (Id. at pp. 896-

897.) 

The court held that “a rounding-over-time policy” does not 

systematically undercompensate employees if it is “neutral, both 

facially and as applied,” because “its net effect is to permit employers to 

efficiently calculate hours worked without imposing any burden on 

employees. [Citation.]” (See’s I, supra, 210 Cal.App.4th at p. 903.) 

Having found that an employer is entitled to use rounding if the system

is “fair and neutral” on its face and in practice (id. at pp. 903, 907), the 

court went on to consider whether a reasonable trier of fact could find 

that See’s Candy’s policy was consistent with section 785.48 under the 

evidence presented. Because the defense expert’s analysis established 

that the rounding resulted in a total gain of thousands of hours for the 

employee class members as a whole, that most of the class member 

were fully compensated for every minute of their time, and that “the

equally to the employee-protective policies embodied in California labor law.” 

(See’s I, supra, 210 Cal.App.4th at p. 903.) The court observed that “the 

rounding practice has long been adopted by employers throughout the 

country.” (Ibid.) To construe the requirements of California’s wage laws in a 

manner inconsistent with federal law, “would preclude [California] employers 

from adopting and maintaining rounding practices that are available to 

employers throughout the rest of the United States.’” (Ibid., quoting East v. 

Bullock’s Inc., supra, 34 F.Supp.2d at p. 1184.) 

12

 
majority was paid for more time than their actual working time,” the 

court found that See’s Candy had met its burden to show a triable issue 

of fact regarding whether its nearest-tenth rounding policy was proper 

under California law.10 (Id. at p. 908.)

Focusing on the evidence that “the majority” of See’s Candy 

employees were overcompensated under the system at issue in See’s I, 

real parties contend that the case stands for the proposition that a 

rounding policy is unlawful where a bare majority of employees lose 

compensation.11 We do not read the holding in See’s I to create such 

rule. Because the expert analysis established that the class as a whole 

gained time and compensation and that the majority of See’s Candy’s 

10 In See’s I, the appellate court reviewed the trial court’s order granting 

the plaintiff’s motion for summary adjudication. In a subsequent decision, 

Silva v. See’s Candy Shops, Inc. (2016) 7 Cal.App.5th 235 (See’s II), the 

appellate court affirmed a grant of summary judgment in favor of See’s 

Candy on essentially the same facts: “(1) the aggregate impact of rounding 

actual time punches produced a net surplus of 2,749 employee work hours in 

time paid and thus resulted in a net economic benefit to the employees as a 

group; (2) 67 percent of the employees had either no impact or a net gain 

under the rounding policy; (3) the rounding policy did not negatively impact 

employee overtime compensation: it was ‘virtually a wash -- neither the 

employees nor See’s [Candy] benefited from this rounding practice’; and (4) 

there was no meaningful impact on [the plaintiff’s] hours paid under the 

rounding practice; she obtained an aggregate surplus of 1.85 hours.” (Id. at 

pp. 242, 250.) The court concluded that “See’s Candy met its burden to show 

the rounding policy is fair and neutral on its face and is used in a manner 

that over a relevant time period will compensate the employees for all the 

time they have actually worked.” (Id. at p. 252.)

11 As real parties acknowledge, the majority of employees at San Gabriel 

either had time added to their shifts and received compensation for time they 

did not work, or broke even. A slight majority (52.1 percent) of Anaheim 

employees had time (an average of 2.33 minutes) subtracted. Only by 

combining the data for the two facilities can real parties assert that the 

majority of employees suffered a loss. 

13

 
employees gained time and compensation, the court had no basis to 

resolve whether either factor was decisive. However, two recent federal 

district courts have considered the issue and, relying on Corbin and 

See’s I, concluded that the fact that a slight majority of employees lost 

time over a defined period was not sufficient to invalidate an otherwise 

neutral rounding practice. (Utne v. Home Depot U.S.A., Inc. (N.D. Cal.,

Dec. 4, 2017, Case No. 16-cv-01854-RS) 2017 U.S. Dist. LEXIS 199184

(Utne); Boone v. PrimeFlight Aviation Services, Inc. (E.D.N.Y., Feb. 20, 

2018, No. 15-CV-6077 (JMA) (ARL)) 2018 U.S. Dist. LEXIS 28000

(Boone).)

In Utne, the timekeeping system was programmed to round either 

up or down to the nearest quarter of an hour for purposes of calculating 

employee compensation. (Utne, supra, 2017 U.S. Dist. LEXIS 199184 at

p. *5.) The employer’s expert performed an analysis of a representative 

sample of the potential class over a five-year period and found that: 

51.3 percent of shifts had minutes added rather than subtracted; in 

more than half of all analyzed pay periods, employees were credited 

with extra minutes; the average potential class member was paid for an 

additional 11.3 minutes; and overall, the employer paid for an 

additional 339,331 minutes (5,656 hours) when compared to the actual 

minutes employees worked. (Id. at p. *7.) However, the plaintiff had 

lost time -- an average of 36 seconds per shift -- and of the 13,387 

employees analyzed, 53 percent were negatively impacted by the 

rounding, an average of 141.7 minutes per employee over the five-year 

period. (Id. at p. *9.) The court nonetheless granted summary 

judgment in favor of the employer: “The rounding policy rounds both up 

and down, and is thus facially neutral. There is no evidence that the 

rounding policy is applied differently to [the plaintiff] or to any of the 

proposed class members. [The employer’s] expert calculations are 

sufficient to establish that the practice does not systematically 

undercompensate employees over time.” (Id. at p. 11, italics omitted.) 

The court observed that the figures were “consistent with [the 

14
employer’s] contention that rounding contemplates the possibility that 

in any given time period, some employees will have net 

overcompensation and some will have net undercompensation. Given 

the expected fluctuation with respect to individual employees, shifting 

the time window even slightly could flip the figures.” (Id. at pp. *11-

12.)12

Boone also involved a quarter-hour rounding system. As in Utne, 

expert evaluation of employee compensation during the relevant period

resulted in evidence that a majority (58.5%) of all time entries were 

either neutral or rounded in favor of the employee and that the 

employer suffered a loss overall, but that the majority of employees 

(55.8%), including the plaintiff, suffered minor losses in compensated 

time. (Boone, supra, 2018 U.S. Dist. LEXIS 28000 at pp. *6-7, 26.) 

Relying on the Ninth Circuit’s conclusion in Corbin that “‘the rounding 

policy is not meant to “ensure that no employee ever lost a single cent 

12 The Utne court rejected the plaintiff’s request to certify as a class those 

employees who lost time as “expressly foreclosed by Corbin, which explained 

that the federal rounding regulation was not meant to apply individually to 

each employee.” (Utne, supra, 2017 U.S. Dist. LEXIS 199184 at p. *14, citing 

Corbin, supra, 821 F.3d at p. 1077.) “Provided [the] rounding policy does not 

systematically undercompensate employees over time, [the plaintiff] cannot 

defeat summary judgment on his rounding claims by limiting his proposed 

class to only those employees who happen to come out behind during the class 

period. As the Ninth Circuit explained in Corbin, the federal regulation did 

not intend to reward strategic pleading where a plaintiff includes only pay 

periods during which he or she came out behind a few minutes.” (Id. at 

p. *15.) The court also rejected the plaintiff’s contention that See’s I “goes too 

far under California law and does not reflect how the California Supreme 

Court would treat rounding”: “Because California law does not address 

rounding one way or another, courts must ask whether the federal rule is 

consistent with California wage and hour law. The California Court of 

Appeal [in See’s I] carefully studied the issue and answered that question in 

the affirmative. [Citation.]” (Utne, supra, at pp. *13-14.)

15

 
over a pay period”’” (Boone, supra, at p. *27, quoting Corbin, supra, 821 

F.3d at p. 1077), the court granted summary judgment in favor of the 

employer, finding that the plaintiff “failed to raise a genuine issue of 

material fact on whether [the employer’s] timekeeping system did not 

‘result over a period of time, in failure to compensate the employees 

properly for all the time they have actually worked.’” (Boone, supra, at 

p. *28, quoting 29 C.F.R. § 785.48(b).) The court explained: “[A]n 

analysis of the putative class as a whole demonstrates that the 

rounding policy was neutral. It is undisputed that (1) 58.5% of all time 

entries resulted in either neutral rounding or rounding in favor of the 

employee; (2) the 138 putative class members gained compensation or 

broke even on approximately 54.5% of their shifts; and (3) 42% of the 

putative class members gained compensation from rounding over the 

entire length of the class period analyzed. Further, . . . Plaintiff does 

not refute that [when employees lost time,] the 138 putative class 

members lost on average 15.67 seconds per shift. Although the data 

analyzed here . . . did not average out to 0, Defendant’s expert 

calculations are sufficient to establish that the practice does not 

systematically undercompensate employees over time.” (Id. at pp. *27-

28, italics omitted.)

Real parties contend that two federal cases -- Eddings, supra, 

2012 U.S. Dist. LEXIS 51158 and Shiferaw, supra, 2016 U.S. Dist. 

LEXIS 187548 -- support the position that section 785.48 is violated 

where the majority of the employees suffer a minor loss in 

compensation. In Eddings, one of the two systems challenged in the 

complaint required the employees to round their own time up or down, 

rather than input their time and leave it to an impartial system to 

round up or down according to a fixed formula. The employer claimed 

to have communicated to the employees that time was always to be 

rounded in their favor, but some employees submitted declarations 

stating they were told to round down. Accordingly, the court found the 

existence of a genuine issue of material fact “both as to the facial 

16
neutrality of the [system] and to the effects of its application . . . . ” 

(Eddings, supra, at pp. *15-16.) Because the policy “could have been 

interpreted differently by different associates,” and it was “at best 

ambiguous as to whether employees are ever allowed to round up,” the 

fact that the majority of employees gained time was not determinative. 

(Id. at pp. *15-16.)

In Shiferaw, which involved a system that automatically rounded 

time to the nearest quarter hour, the court stated that “two pragmatic 

approaches” could be used “to gather data” in determining whether a 

rounding system, neutral in its face, was neutral in application: “(1) 

compare all rounded punches with the actual punch times to determine 

the overall net effect -- in hours, minutes, and/or seconds -- of the 

rounding; and (2) compare the percentage of employees for whom the 

rounding resulted in a net loss of time -- those who were 

undercompensated -- with the percentage of employees for whom the 

rounding resulted in overcompensation.” (Shiferaw, supra, 2016 U.S. 

Dist. LEXIS 187548 at pp. *6, 81.) The plaintiffs’ expert provided data 

establishing that the rounding policy resulted in net undercompensation of the employees in the amount of 1,783 hours and that the 

majority of employee (53.3%) lost time due to rounding. (Id. at p. 83.) 

Contrary to real parties’ assertion that “the . . . court concluded [the] . . .

expert created a triable issue of fact under either the net effect or 

percentage methodology,” the court considered both assumptions in 

finding “[the] evidence . . . sufficient to show the existence of a genuine 

dispute as to whether [the employer’s] challenged rounding policy 

results in a ‘failure to compensate the employees properly for all the 

time they have actually worked.’” (Id. at p. 85, italics omitted.) As the 

plaintiffs introduced evidence that both the net effect and percentage 

effect analysis supported their claims, the court had no cause to 

consider whether a difference in either datapoint would have led to a 

different result. Moreover, Shiferaw was decided before the Ninth 

17
Circuit issued its decision in Corbin. To the extent it conflicts with that 

decision, it is no longer good law. 

Here, the rounding system is neutral on its face. It “rounds all 

employee time punches to the nearest quarter-hour without an eye 

towards whether the employer or the employee is benefitting from the 

rounding.” (Corbin, supra, 821 F.3d at pp. 1078-1079.) It also proved

neutral in practice. At San Gabriel, a minority of employees lost time, 

the remainder either gained time or broke even, and overall it caused 

the employer to compensate employees for 1,378 hours not worked. At 

Anaheim, although a slight majority of employees (52.1 percent) lost 

time, overall, employees were compensated for 3,875 more hours than 

they worked. Because petitioners presented undisputed evidence that 

the rounding system was neutral on its face, and that employees as a 

whole were significantly overcompensated, the evidence established 

that petitioners’ rounding system did not systematically undercomepensate employees over time. The fact that a bare majority at one 

hospital lost minor sums during a discrete period did not create an issue 

of fact as to the validity of the system. We agree with the court in 

Corbin that the regulation does not require that every employee gain or 

break even over every pay period or set of pay periods analyzed;

fluctuations from pay period to pay period are to be expected under a 

neutral system. (See also Utne, supra, 2017 U.S. Dist. LEXIS 199184 at

p. *12 [“[R]ounding contemplates the possibility that in any given time 

period some employees will have net overcompensation and some will 

have net undercompensation”]; Boone, supra, 2018 U.S. Dist. LEXIS 

28000 at pp. *27-28 [rounding policy was neutral as applied where 

majority of time entries resulted in rounding in favor of employees, 

class members broke even or gained compensation on their shifts, and 

bare majority of class members lost time, but only an average of 15.67 

seconds per shift].) We further agree with the court in See’s I and See’s

II that a system is fair and neutral and does not systematically 

undercompensate employees where it results in a net surplus of 

18
compensated hours and a net economic benefit to employees viewed as a 

whole. 

Nothing in our analysis precludes a trial court from looking at 

multiple datapoints to determine whether the rounding system at issue

is neutral as applied. Such analysis could uncover bias in the system

that unfairly singles out certain employees. For example, as the trial 

court discussed, a system that in practice overcompensates lower paid 

employees at the expense of higher paid employees could unfairly 

benefit the employer. However, real parties presented no evidence of a 

bias in the system or that the policy was applied differently to different 

employees. Dr. Foster analyzed the data on an overall basis, a per shift

basis and a per employee basis. Her analysis established that overall, 

at both hospitals, the rounding policy benefitted employees and caused 

petitioners to overcompensate them. Her per shift analysis established 

that for the majority of shifts, the employees at both facilities gained 

compensable time. Moreover, at San Gabriel, the majority of employees 

gained time and compensation or broke even during the approximately 

four years of the study. The sole discrepancy was at Anaheim where a 

slight majority (52.1%) lost an average of 2.33 minutes per employee 

shift. But where the system is neutral on its face and overcompensates 

employees overall by a significant amount to the detriment of the 

employer, the plaintiff must do more to establish systematic 

undercompensation than show that a bare majority of employees lost 

minor amounts of time over a particular period. Because the 

petitioners’ employees benefited overall from the rounding policy, the 

fact that a bare majority lost a minimal amount of time was not 

sufficient to create a triable issue of a fact. Petitioners’ motion for 

summary adjudication should have been granted.13

13 Because we conclude petitioners’ rounding system complies with 

section 785.48, we do not consider whether the de minimus rule, which 

permits “insubstantial or insignificant periods of time beyond the scheduled 

19

 

(Fn. is continued on the next page.)
DISPOSITION

The petition is granted. Let a peremptory writ of mandate issue 

directing respondent superior court to set aside that portion of its order 

of September 26, 2017 denying petitioners’ motion for summary 

adjudication of issues, and issue a new order granting such motion. 

Petitioners are awarded their costs on appeal.

CERTIFIED FOR PUBLICATION

MANELLA, J.

We concur:

EPSTEIN, P. J.

WILLHITE, J.

working hours to be disregarded” (29 C.F.R. § 785.47) -- applies in California. 

That issue is currently before the Supreme Court in Troester v. Starbucks 

Corp., rev. granted Aug. 17, 2016, S234969.

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