California Employers Must Pay For Expected Off-the-Clock Time

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Jul 27, 2018

California employers who regularly have their hourly workers do brief, after-hours tasks must pay them for the time, the state’s Supreme Court said Thursday.

In a case arising out of a Starbucks shift supervisor suing for the off-the-clock time he spent closing the store, a unanimous court said state laws “do not allow employers to require employees to routinely work for minutes off-the-clock without compensation.” However, Justice Goodwin Liu, who wrote the decision, went on to say, “We leave open whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.”

The case arose out of the 9th Circuit Court of Appeals, which asked the California Supreme Court to clarify the state’s wage and hour laws and rules. The appeals court was considering a class action suit brought by the Starbucks supervisor who, following company policy, clocked out before closing up for the night and walking workers to their cars and waiting with them until their ride arrived. He figured he spent 4 to 10 minutes a night doing that, occasionally a few minutes more. The total came to almost 13 hours over the 17 months involved.

Under the Fair Labor Standards Act, small amounts of off-the-clock time is considered de minimis. Guidance from the U.S. Department of Labor says,

“In recording working time under the FLSA, insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded. The courts have held that such trifles are de minimis.”

Based on that rule and past cases, the trial court granted Starbucks’ request for summary judgment. The supervisor appealed, causing the federal appeals court to ask the California court if the state had adopted the FLSA’s de minimis rule.

The Court unanimously said no. “There is no indication in the text or history of the relevant statutes and Industrial Welfare Commission (IWC) wage orders of such adoption.” The court also said, “We hold that the relevant wage order and statutes do not permit application of the de minimis rule… where the employer required the employee to work “off the clock” several minutes per shift. We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.”

Some of the justices wrote concurring opinions to make clear the decision does not require the measurement of every “morsel of employees’ time,” as Justice Mariano-Florentino Cuéllar put it.

Justice Leondra R. Kruger, suggesting that some version of a de minimis rule might apply in certain circumstances. One, she said, could be the time a worker spends reading a text about a schedule change. Or the time it takes to log onto a computer to start their shift.

Stanley Saltzman, who represents the Starbucks’ employees in the class action, said the decision will now force California employers to pay workers for the off-the-clock time they expect of them. Employers, he said, “can’t require their workers to regularly perform minutes per day of unpaid labor.”

Starbucks said it was disappointed with the court’s decision. A spokesperson for the company told the Los Angeles Times, “We will await further disposition of the case before the 9th Circuit as the appeal process continues.”

It is expected the appeals court will revive the lawsuit based on the California ruling.