California wage and hour law mandates that employers must pay their employees for hours worked. Under California law, “hours worked” is defined as the time during which an employee is subject to an employer’s control, and includes all the time the employee is permitted to work, whether or not required to do so. However, the State’s broad definition of this term makes the task of determining what constitutes compensable work time a somewhat confusing process. In large part, compensable hours worked depends on the degree of control which employers exercise over their employees’ otherwise free time. Unless an employee is deemed exempt from minimum wage and overtime laws, he or she may be due compensation for time spent commuting, traveling, being on call or performing incidental work while technically off the clock.
The effect which employer control has on whether an employee must be compensated for commute time is illustrated in the following California decisions. In one case, the Court held that employees must be paid for commute time when their employers required workers to take employer-supplied transportation to a work site. Morillion v. Royal Packing Co., 22 Cal. 4th 575, 588 (2000). However, in another California appellate decision, the Court ruled that employees are not entitled to compensation when the employer simply offered optional transportation. Overton v. Walt Disney Co., 136 Cal. App. 4th 263, 268 (2006). The distinguishing factor between these decisions was the amount of control which the employers exercised over their employees’ commute time.
Similarly, the restrictions which employers place on an employee who is on call will affect whether or not that employee must be compensated for the on call time. When an employee is on call, he or she is able to exercise free time, but must be prepared to respond to work related issues. Employers may set conditions on response times or place geographical and other constraints on employees while they are on call. However, the more the employer’s requirements impede/limit the employees’ ability to enjoy their otherwise free time, the more likely the on call time will amount to hours worked.
Another gray area occurs when employees perform work-related duties before or after the official workday. The Ninth Circuit has recently held that if the work performed outside of the workday is related to the employee’s principal work activities and is not de minimus, then it constitutes hours worked. In the Rutti decision, the small amount of time which a service technician spent completing paperwork before the start of a shift was deemed de minimus; whereas the time he spent uploading data at the end of the day was ruled compensable because it was considered a principal work activity which could take several minutes. The Court failed to establish a bright line rule for what constitutes de minimus; however, the decision gives employers an idea of when they may have to pay employees for incidental work performed outside of the workday.
Under state wage and hour law, time spent traveling during a shift is work time for which a non-exempt employee must be compensated. Travel between work sites during the day is considered hours worked. Employers may reduce wage rates for travel time; however, employers should also be aware that employees may be entitled to overtime compensation for overnight travel.
The rules which apply to exempt employees, who are usually paid salary, are substantially different than those discussed above, which apply to non-exempt employees, who are typically paid hourly. Exempt workers are not entitled to reimbursement for time spent commuting and performing work at home or elsewhere. The rationale is that their salary compensates them for any additional work time.
For any questions or comments regarding this Labor Law Update please contact attorney Michael Daly of the Daly Law Firm at 619-525-7000 or firstname.lastname@example.org.