Relying on the federal Department of Labor rounding standard, a California appellate court ruled last week that even in California an employer is entitled to use the nearest-tenth rounding policy if it is fair and neutral on its face and it is used in such a manner that it will not result, over a period of time, in failure to compensate employees properly for all the time they have actually worked.

The court found a one-tenth rounding policy could be a valid affirmative defense to a class plaintiff’s claims for failure to pay for all work performed as required by California law.  The court agreed with the employer and adopted the federal regulatory standard, which is also used by the state agency charged with enforcing California’s wage and hour laws, and all allows rounding if the employees are fully compensated “over a period of time.”