Update to Labor Practices
It has long been the rule in California that employers must pay employees for “reporting time” pay when employees report to work but are not provided with at least one-half (1/2) of their usual and customary scheduled shift. In a major expansion of this rule, a California Appellate Court decided the case of Ward v. Tilly’s Inc. earlier this year. The Court has now ruled that employees who call in to determine when they will be expected at work must be paid reporting time pay even though they don’t physically report to the employer’s premises. Prior law had allowed employers to notify employees prior to their showing up that their services were not needed and avoid this reporting time pay requirement. Under the new decision, employers will not be allowed to require employees to call in to determine their schedule if it is within a short period determined to be unduly burdensome on the employees. In the case of Tilly’s, the employer required staff to call within a two (2) hour timeframe which the Court found to be inappropriate. This ruling is also retroactive which could impact many employers using the call-in procedure without fair notice of the need to change it. This rule will become effective unless the current pending appeal to the California Supreme Court is granted and/or the decision is overturned or order de-published. With retroactivity on the table, any employer using call-in within the last three (3) years may be subject to reporting time pay plus penalties, interest and attorney’s fees. Although Tilly’s employees had to call in by telephone, the Court’s discussion of technology and its applicability to the current California Wage Order suggests also that accessing an electronic system to determine schedules could similarly be entitled to reporting time pay.
Likewise, rules regarding “on-call” status should also be reviewed in light of the Tilly’s decision. Recently the California Supreme Court decided Mendiole v. CPS Security Solutions and discussed compensability for on-call time. The Court identified several factors including whether the employee lives at the worksite; whether the employer imposes excessive travel restrictions during the on-call time; the frequency of calls to the employee during on-call time; and whether the employee could engage in personal activities during the on-call period. The Court stated that if the factors point to significant employer control, then on-call time is compensable (and would be counted towards overtime as well). Again, the core issue may be the amount of control the employer exerts over the employee during a given period of time since the Court of Appeal in Tilly’s also focused on whether the employee could engage in other personal pursuits during the call-in schedule procedure. The Court indicated that calling in a day or more before the shift would likely have not resulted in the same decision.
Finally, in addition to both on-call and reporting time pay, any employee who is determined to be owed monies for being “subject to the control of the employer” and thereafter having not been under the control but later physically coming to work, may also be entitled to call-back pay under California laws.
Employers who engage in any of these practices are encouraged to have them reviewed by legal counsel and may contact Dave Cohen at The Employers’ Council for further assistance.