Under “Reporting Time Pay” Law, California Employees Are Entitled to Pay Even If Told Not To Come To Work
Published by Eric A. Welter and Megan M. Carboni on April 18, 2019
A California Court of Appeals holds that California employers with on-call polices are required to pay a minimum of two-hours reporting time pay, even if employees are told they are not required to come into work.
In Ward v. Tilly’s Inc., a California Court of Appeals recently held that an employer’s on-call scheduling policy triggers the employer’s obligations under California law to pay employees “reporting time pay.” Under California Wage Order No. 7-2001, Cal. Code Regs., tit. 8 § 11070 (“Wage Order 7”), employers must pay employees “reporting time pay” for each workday “an employee is required to report for work and does report, but is not put to work or is furnished less than half of the employee’s usual or scheduled day’s work.” Under Wage Order 7, an employee entitled to reporting time pay must be paid no less than two hours’ pay, but no more than four hours’ pay at the employee’s regular rate of pay.
The on-call scheduling policy at issue in Ward required employees who were assigned on-call shifts to call-in two hours before an assigned shift was scheduled to begin. If an employee was told to come into work, the employer would pay the employee for the shift. If not told to come into work, the employee would not receive any compensation for having been “on call.” In Ward, the plaintiff employee argued that an on-call employee’s call to her employer before a scheduled on-call shift constitutes “report[ing] for work” within the meaning of Wage Order 7. The plaintiff argued that under such a policy, an employee is owed reporting time pay under Wage Order 7. The defendant employer in Ward argued that only physically reporting for work at the work site constitutes “report[ing] for work” under Wage Order 7, thus, employees who call in and are told not to come to work are not owed reporting time pay.
The Court reasoned that the plain language of Wage Order 7 was ambiguous as to the meaning of “report[ing] for work.” After consulting the regulatory history and legislative intent of Wage Order 7, however, the Court opined that the purpose of the Wage Order was to compensate employees and encourage proper notice and scheduling. The Court went on to state that the history and purpose of the Wage Order were consistent with the plaintiff’s argument that call-in requirements trigger reporting time pay.
The Court ultimately found the defendant employer’s arguments unpersuasive, as “on-call shifts burden employees, who cannot take other jobs, go to school, or make social plans during on-call shift—but who nonetheless receive no compensation from [an employer] unless they are ultimately called into work.” The Court went on to state that the defendant employer’s on-call scheduling and pay policy “is precisely the kind of abuse that [Wage Order 7] reporting time pay was designed to discourage.”
California employers should review on-call scheduling policies in light if the Ward decision. If necessary, California employers should consider modifying any such policy to avoid triggering reporting pay requirements. While the decision is limited to the “mercantile industry” (purchasing, selling, or distributing good or commodities at wholesale or retail), other industries may also be required to comply with reporting time pay requirements under similar wage orders.
Employers outside of California may not be subject to California’s Wage Order 7, however, employers in other states should review reporting pay laws and regulations to ensure compliance. Other states regulating reporting pay requirements include Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, and D.C.Topics: California, California Court of Appeals, Class Actions and Complex Litigation, Employment Litigation, Hiring, Policies Procedures and Employee Handbooks, Wage and Hour Compliance and Litigation, Wage Order, wage order 7