03 Apr COMPENSABLE WORK HOURS EXPANDED AGAIN BY SUPREME COURT
The California Supreme Court issued another decision further expanding the scope of what constitutes compensable time for California employees. Here is a link to the opinion in Huerta v. CSI Electrical Contractors (S275431 3/25/24).
https://www.courts.ca.gov/opinions/documents/S275431.PDF
This case considered if construction workers who are covered by Wage Order 16 must be paid for the time they spend driving in their personal vehicle between a security gate and the worksite at the beginning of the work day, time they are waiting for a vehicle inspection when exiting through the security gate at the end of the work day, and time during on-premise meal breaks that are otherwise covered by the CBA meal break exemption for certain union construction workers. Expanding on its decisions in Frlekin v. Apple Inc. (2020) 8 Cal.5th 1038 [time spent waiting to complete bag check compensable] and Troester v. Starbucks Corp. (2018) 5 Cal.5th 829 [rejecting application of de minimis rule], the Supreme Court in Huerta ruled that employees must be paid for this time.
As to the vehicle inspections, the Court concluded that time spent by employees on vehicle inspections was primarily for the employer’s benefit, and that employees were under the employer’s control during the inspection. Thus, this time was held to be compensable work hours.
For the travel time, the Court observed that Wage Order 16 covering the construction industry provides that “travel that occurs after the first location where the employee’s presence is required by the employer shall be compensated at the employee’s regular rate of pay . . .” The Court held that this provision applies when the employee’s presence at a location “is required for an employment-related reason other than the practical necessity of reaching the worksite.” For this travel time to be compensable (unlike regular commute time), the Court concluded the employer must require the employee’s presence at the initial location and that the employee’s presence was required for an employment-related reason other than accessing the worksite. Because both requirements were satisfied, the Court held the travel time was compensable.
Conversely, the Court held that the travel time did not constitute “hours worked” under the Wage Order definition because of the employer’s lack of control over the employees while driving. Although the time was still compensable as “travel time” under the special provision in Wage Order 16, the Court’s distinction between compensable “travel time” and “hours worked” could be significant for employees who are covered by other Wage Orders which do not include the travel time provision. In work settings where employees must go through a security entrance and then walk to the area where the time clocks are located before clocking in for the day, whether this time constitutes compensable “work hours” is often disputed in wage and hour litigation. The Huerta decision suggests this time is not compensable outside of the travel time situation under Wage Order 16.
Lastly, even though the employees were exempt from the meal break rules under the CBA exemption in Labor Code section 512(e), (f) and the Wage Order applicable to certain unionized construction workers, the Court held time during meal breaks is compensable if the employees cannot leave the worksite during breaks and are subject to the employer’s control. As such, even though employees could not bring claims for missed meal break premiums because they are exempt from section 512, they can still bring claims for unpaid wages if the employer places any restrictions on time spent during meal breaks.
The Huerta decision is another in a series of cases decided by the Supreme Court in recent years expanding the scope of compensable work time for California employees. This ruling may also provide additional insights into how the Court will decide another important pending case over time clock rounding in Camp v. Home Depot USA, Inc. which should be decided later this year. Given the Court’s expansive view on compensable work time, and the requirement to pay employees for all time under the employer’s control, time clock rounding that results in some employees being paid less than their actual clock time may also be problematic when the Court decides Camp. In the meantime, the uncertainty over rounding claims will continue to be a factor both parties must consider in mediation.
