Time Clock Laws in California
To understand California time clock laws, it is first necessary to understand the rules that govern timekeeping generally. For instance, California law requires employers to keep track of the hours an employee works. (IWC Wage Order 1-2001, § 7(A).) This means that employees must be permitted to record their time, and, when the records are created by the employer, the employer must retain them. Failure to do so exposes an employer to liability for unpaid wages. (Id., § 7(A)(2).) There are many details to consider when it comes to time records. For example, they must show not only actual hours worked, but also meal period waivers, and when meals were provided . Employers must also maintain specific information about each employee, including name, address and other identifying information (IWC Wage Order 1-2001, § 7(C)(1)(a)). It bears repeating, however, that these are minimum requirements. Thus, employers should review their timekeeping practices and policies to ensure compliance with all applicable timekeeping laws. In many cases, employers choose to keep even more detailed records than mandated by law to prevent false claims of unpaid wages, such as time records that were not completed by the employer; time records not maintained by employees on a daily basis; or time records that were altered after the fact.
Who is Responsible Under California Time Clock Laws?
One of the basic employer requirements under California employer time clock law (and under federal law) is to ensure that all time worked is tracked. In general, it is the responsibility of employers to track time worked as this is what the law lists as the requirement (also, employers are breaking the law if they just ignore it).
Employer Responsibility to Track Time
Track time worked? The issue of time clock laws is almost comical in its simplicity; the law is essentially saying that employers must record time worked. Many times, this tracking can be accomplished with the most basic time clock; punch out on your way out, keep your break and meal periods; or simply write down the times on a piece of paper. The timeliness and record keeping of this time turned in is entirely up to the employer, and there are no laws setting out specific requirements for that. Rather, just keep the times and retain them (there is no specific requirement as to how long you must keep this information for). However, once the time is received and recorded, the employer is required to keep these records for specific periods of time.
Record-Keeping Requirements
Specific information that must be kept: Not only must the time be kept, but employers in California are required to keep this information along with other specific information for certain periods of time. The period of time the information must be retained is specific to the type of records:
Again, this is the minimum requirement. As already mentioned, for many employers, if they are sued, they often find themselves producing records a lot longer than the minimum. The difficulty with records requirements is that for the most part, employers are freeing to set up their own internal policies on record retention. For this reason, it helps to have an attorney familiar with California labor law help create your record retention schedules.
Employee Rights Under California Law Using a Time Clock
Employees are entitled to accurate time clock reports that ensure proper wage calculations. If you have not been paid for hours worked because the employer did not accurately record your time, or if your employer mismanages overtime and non-overtime wages due to inaccurate clock reports, you may have legal rights.
The following additional employee rights in the context of time clock usage include: The federal Fair Labor Standards Act (FLSA) requires that timesheets be kept for at least three years, and wage records further require that they be kept for a minimum of two years. Employers are required to keep precise and reliable time keeping records. Employers must keep a "form of daily record showing hours worked, weekly total of earnings, regular hourly rate of pay and a total of all premium pay for overtime." The FLSA regulations require the following data to be maintained and preserved: (a) Employee’s full name and social security number. (b) Address, including zip code. (c) Date of birth, if under 19 years old. (d) Sex and occupation. (e) Time and day of week when employee’s workweek begins. (f) Hours worked each day and each week. (g) Total daily or weekly earnings. (h) Total pay for non-overtime hours worked each month. (i) Deductions from or additions to wages. (j) Total wages paid each pay period.
Knowing your rights under the law and your employers’ responsibilities, as well as what your employer cannot do in regard to its time clock policies, can ensure you are properly paid for every minute you work.
Consequences of Non-Compliance for California Employers
The financial investment of non-compliance is multifaceted, as is the analysis of this serious issue. Whether employers face penalties in an administrative or civil action may depend, in part, on the specific circumstances. For example, willful violations can result in higher penalties and it is questionable whether the penalties in a private lawsuit would be in addition to those in an administrative action. The Labor Commissioner maintains that the penalties assessed through administrative actions cannot be collected in a civil action. (See Martinez v. J & L Door (2012) 212 Cal.App.4th 17.) It could be argued, however, that there is nothing in California Labor Code Section 558 that even arguably prohibits the imposition of fines "in a civil action . " In addition, the Labor Commissioner has also argued the section does not authorize the Labor Commissioner to impose penalties after a civil court awards section 558 penalties. (See Martinez v. J & L Door (2012) 212 Cal.App.4th 17.) Employers also run the risk of having to pay up to 25% interest compounded daily on unpaid wages, which can accumulate quickly. Moreover, regardless of the interpretation of the provisions of Section 558, employer who fail to meet its requirements are at risk of being subjected to law suits or claims for unpaid wages, for meal period premium pay and for waiting time penalties (up to 30 days of wages, in addition to any wages due at time of termination—generally up to 90 days of wages).
Tips on Time Clocks for Employers
A common practice amongst California employers is to document the beginning and end of an employee’s workday using electronic time clock systems. However, these electronic clock systems have given rise to a host of problems for employers who fail to maintain accurate records of employee hours worked, meal periods, rest periods, and overtime.
The California Labor Code, which governs the training, understanding, and administration of California wage and hour laws, is specific about the employer’s ability to use time clock systems in the workplace. Under Section 1174, California employers must maintain accurate records of their employees’ work hours. Use of time clock systems, be they electronic or not, does not absolve the employer from this requirement to maintain records compliant with the law.
Technology can be a valuable asset to California employers seeking to maintain a compliant workplace. Using technologies that require both initial and on-going training and supervision of employees, particularly upon the first instance of any time clock adjustment, can help prevent time clock violations. For example, California employers should ensure their electronic time clock system requires employees to make themselves available for periodic review and any necessary input of their time entered. First, this approach provides a check on the employee’s knowledge of timekeeping responsibilities and serves as a reminder of the importance of accurate timekeeping. Second, this approach provides the employer an opportunity to review the employee’s time entries for accuracy. Only after the initial training and review should the employee be permitted to independently make clock adjustments.
For California employers who currently maintain electronic time systems that are not equipped to require on-going review and supervision, the same goals of employee knowledge and record accuracy can be achieved without it. For example, rather than completely eliminating employees’ ability to modify their time entries, employers should institute a policy that requires employee adjustment requests be submitted to the supervisor for review. Upon approval, the supervisor should input the adjustment into the electronic time clock.
Recent Developments in California Time Clock Laws
Over the past few years, California state and federal courts have issued several rulings that have added, tweaked, or enhanced important provisions to California’s time clock laws. California class action plaintiffs have tried to advance claims that employees should be paid for travel time, on-call time, and for time spent changing clothes. These efforts have been generally stymied, though, by recent court decisions. For example, in Mendiola v. CPS Security Solutions, Inc., 60 Cal.4th 833 (2015), the California Supreme Court reversed the Court of Appeal decision that found its state wage and hour laws limited employers’ obligation to pay for any time spent traveling in the course of employment to only those periods when an employee is actually traveling to and from work at the beginning and the end of the work day. Under that Court of Appeal standard, similarly situated employees would not have been entitled to pay for all of their travel time. The California Supreme Court held the state wage and hour laws do not explicitly limit the employer’s obligation to pay for travel time to only those periods when an employee is physically moving. Rather, the California Supreme Court found those laws require employers to compensate employees for all time spent actively engaged in work and anything that truly benefits the employer. Similarly, the California Court of Appeal recently reversed a trial court’s decision that had held under the Fair Labor Standards Act (FLSA), and the California Labor Code, the employer had no duty to compensate employees for time spent in security screening lines because none of the security screening measures implemented imposed so much as to amount to a constructive seizure of employees, or rendered them subject to discipline for not passing through the security screening measures in the required amount of time . (See also, Busch v. Cole Hardware, Inc., 2017 WL 3435748 (Cal. Ct. App. Aug. 10, 2017)). Since the trial court decision, Apple, Inc., Starbucks, Abercrombie & Fitch, and Nike have settled FLSA claims for significant amounts related to the time their employees have spent waiting in security lines at various retail locations. The Mendiola court also struck down the trial court’s reliance on cases setting minimum requirements for wage and hour claims that were not unique to California. In addition, the court expressly stuck to the plain language of the state’s wage orders and Labor Code provisions, which provide a right to minimum wages for all work and all hours worked. The court noted an exception exists only if the time spent is de minimis. (Hence, the potential FLSA implications on the trails on those security screening claims). Further, it did not agree with the trial court’s focus on the circumstances under which the security screenings were conducted. Instead, the California Supreme Court found the frequency and duration of the employees’ pre-shift and post-shift activities, the number of employees subjected to the screening, and its location were all factors that made the screenings compensable. Because the same time clock rules apply to all pre and post-shift activities, it is likely the California Court of Appeal will also adopt the California Supreme Court’s reasoning in Mendiola as precedent in future cases challenging wage deductions for similar pre-shift and post-shift activities. Thus, while the specific analysis may differ, California courts continue to view time clock cases through the broad lens of the traditional common law standard which requires employers to pay employees for all work and for all hours worked.