Until recently, California employers provided "reporting time" pay when workers report to work but are not put to work or work less than half of their usual schedule. No longer.
The California Court of Appeal recently determined that reporting time pay can be owed for certain "on-call" shifts, where the employee must call in to find out if he or she is needed but is told not to report to work.
The court found, in a February 4, 2019 decision in Ward v. Tilly's, Inc., that the act of calling in on the part of the employee triggers the state's reporting time pay requirements in these circumstances, even if the employee is not actually required to come in to work.
California Employers With "On Call" Employees are Now "On Notice"
The lawsuit challenged the on-call scheduling practices of Tilly's, inc. stating that they violated Wage Order 7-2001 (Cal. Code Regs. Tit. 8, § 11070). This order regulates the wages, hours, and working conditions in the mercantile industry and requires employers to pay half the usual or scheduled day's work, but in not less than two hours or more than four hours
In addition, the wage order requires that an employee must be paid for two hours if required to report for work a second time in a workday and works for less than two hours on the second reporting.
According to one article,
"The court found that on-call shifts burdened employees, who cannot take other jobs, go to school, or make social plans during on-call shifts—but who nonetheless received no compensation from Tilly's unless they ultimately are called in to work. The court noted that this was precisely the kind of abuse that reporting time pay was designed to discourage. Accordingly, the court reversed the trial court's judgment of dismissal and remanded for further proceedings."
In this instance, the employer required employees to call in two hours before an "on-call" shift was scheduled to begin to determine if they were actually going to work that day. TIlly's also required its workers to work a regular shift after a schedule "on call" shift that the worker may or may not have to come in for.
In a different scenario, the store scheduled employees for "on-call" shifts immediately after a regular shift and workers would only learn during their shift if they had to remain for the on-call portion. In both of these situations, the workers were paid for their actual time worked, but were not compensated for the required portion of the "on-call" shifts they didn't need to work.
In the Tilly's lawsuit, the defendant argued that the act of "reporting to work" per the state's Wage Order 7-2001 required the employee's "physical presence at the workplace at the start of a scheduled shift," and not simply calling in to verify the work schedule beforehand.
The plaintiff contended that because employees often work remotely in the current workplace environment, and many use their phones for timekeeping purposes, that the phrase "reporting to work" should be read more broadly.
The California Court of Appeal agreed with the plaintiff and determined that, because the phrase "reporting to work" was ambiguous, its decision would be based on the purpose of the state's reporting time pay requirement. The court found that the requirement is twofold:
1) to compensate employees, and (2) to encourage proper notice and scheduling.
What This Means for California Employers
The Court found that Tilly's "on-call" process to be overly burdensome for its employees. The store's process prevented employees from working other jobs or scheduling other activities because it required them to be available. In addition, it made any child-care arrangements difficult and potentially costly.
Consequently, the Court sided with the plaintiff in this case and ultimately found that reporting time pay should be required in these circumstances. The court determined that doing so would achieve the wage order's purpose of compensating employees and encouraging employers to properly notify and schedule employee work in advance.
As a result of the court's decision, California employers who require their workers to call in or otherwise contact them to learn if he or she needs to report for a scheduled shift, may owe reporting time pay if those employees are not needed, even though the employees do not physically come in to work.
Although this was a case involving a retail employer, all California employers using "call-in" scheduling systems should review and possibly revise their policies and practices as reporting time pay may now be required.
Payroll and Labor Law Compliance is Critical
Employers and managers must be diligent in maintaining compliance when scheduling shifts and when making shift changes. Understanding California labor laws and considering the impact when scheduling is critical to ensure that you are staying compliant and, therefore, minimizing the cost related to reporting time pay due.
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The complete online payroll solutions provided by Accuchex covers everything you need to make sure your payroll is taken care of and that is why we are a trusted California payroll solutions provider. We offer our services in California Bay area – North bay, South Bay and East bay, including San Francisco. Call Accuchex Payroll Management Services at 877-422-2824.