A pivotal California decision on the issue of “reporting time pay, has expanded the definition of “time worked” here in California. In Ward v. Tilly’s, a divided California appellate court recently held that “reporting time pay” is owed to employees who have to call-in two hours in advance to see if they are on the schedule (and then are told not to come in to work).
This decision is a significant departure from the traditional understanding that reporting time is owed only if an employee physically shows up for a scheduled shift, and then finds out no work is available.
What is Reporting Time Pay?
California has 17 different wage orders. These orders determine the wage and hour laws for various industries. Most wage orders contain a provision that states, when an employee is required to report for work, the employee must be paid for half of that shift - - a minimum of two (2) hours and a maximum of four (4) hours at the employee’s regular rate of pay.
Example: A cashier is scheduled to work an eight-hour shift, but is sent home after the first hour of work, because business is slow. The cashier would be entitled to four hours of pay (half of the shift).
Example: A cashier is scheduled to work a five-hour shift and is sent home after the first hour because business is slow. The cashier is entitled to two and half hours of pay.
Additionally, if an employee is required to report to work a second time in one workday (a split shift) and is furnished less than two hours of work on the second reporting, the employee must be paid for two hours at the regular rate of pay.
Employees Burdened by Call-In Policy
In this case, the clothing store Tilly’s required certain employees to call-in two hours prior to the start of a shift to see if they were scheduled that day. Employees were instructed to consider these so-called “on call” shifts a “definite thing until they are actually told they do not need to come in.” An employee who failed to call in, called in late, or refused the shift was disciplined. Three violations could lead to termination.
Employees were not paid if they called the store prior to a shift and were told they were not needed. Tilly’s employees brought a class-action lawsuit alleging that they should have received reporting time pay for these call “on call” shifts.
The court of appeal in a 2-1 decision agreed with Tilly’s employees. The court found that because the employees were required to call in two hours before the shift, their activities were constrained and they were burdened. According to the court, Tilly’s employees:
- May need to make and pay for childcare or eldercare, even if they don’t get called into work.
- Cannot commit to school classes or other jobs during these shifts as they may have to go
- Cannot do things with friends or families
- Must be able to make a phone-call during at the required time – so they can’t be in an area with no cell service, be sleeping, be at the movies, etc.
“In short, on-call shifts significantly limit employees’ ability to earn income, pursue education, care for dependent family members, and enjoy recreation time.”
The court said that the employer, not the employee, should instead bear the burden of under or over scheduling. California’s reporting time pay requirement encourages employers to accurately project labor and scheduling needs and partially compensates employees for the time and expense associated with making themselves available for work.
Takeaways for Employers
This case is limited to the facts at hand - - a call in requirement of two-hours before the scheduled shift. The court did not decide where to draw the line - - for instance would a requirement to call in the day before be okay?
But for now, an employer will likely owe reporting time pay any-time they direct an employee to call in to confirm a same day shift.
Restaurants, retailers and other employers who use this type of call-in scheduling will need to review their practices.
- Don’t require employee to call-in to confirm shifts on the same day they might work.
- Make a list of employees who want extra shifts and call them when you need last minute workers (the employer calls these employees as needed vs. requiring employees to call-in).
- If you want to keep your existing same day call-in practices, start paying reporting time pay when employees are made to call-in, but there is no work for them.
- If overstaffing happens, have employees work on other tasks that usually don’t get done, instead of sending them home before their scheduled shift is over.
- Ask employees if anyone wants to leave work early when business is slow. Many times at least one employee is anxious to get off early.
Keep in mind that San Francisco already has a fixed or “predictive” scheduling ordinance, and the California legislature has been trying to get one through for the past several years so the days of call-in shift scheduling may be numbered.