On November 29, 2017, a California Superior Court judge ruled that employers that require employees to set aside time for a shift and have them call in to determine if they will indeed be working are required to pay employees “reporting time pay,” even if the employee never actually steps foot inside the business for a shift. This ruling serves as a cautionary reminder to employers that California disfavors “on-call shifts,” and employers should expect to pay employees a premium to utilize such shifts.
California Requires Employers to Provide “Reporting Time Pay” to On-Call Employees even if they Don’t End Up Working
Under California wage orders, employers must provide non-exempt employees with reporting time pay if an employee is required to report to work but is either not put to work or finishes less than half of his or her usual or scheduled day’s work. Under such circumstances, the employer must pay the employee half the usual or scheduled day’s work, but, in no event should the employer pay the employee less than two hours or more than four hours of pay. While the wage orders do not define what constitutes “reporting to work” for purposes of the law, it is now clear that employers cannot avoid the mandates of the law by simply having their employees call in on a day they might be expected to work rather than actually appearing in person—particularly if they are subject to discipline if they don’t call in or show up for work.
Two Previous Cases that Did Not Hold Employer Responsible for Reporting Time Pay Were the Exception, NOT the Rule
In two prior cases, California courts had held that, under the plain language of the California wage orders, employers could not be held liable for reporting time pay unless the employees actually physically reported to their place of work and the employer turned them away. However, in a class action filed against Yoshinoya America, Inc.—a Japanese fast food restaurant—the California Superior Court distinguished those cases, explaining that a telephone appearance is enough to count as reporting for work for purposes of state law where the employer threatens to impose discipline if the workers ignore their call-in responsibilities.
Employers Should either Not Require Workers to Be On Call, or Be Prepared to Provide Reporting Time Pay
While this decision is likely to be appealed, it is unclear whether or not it will be reversed. California courts have historically ruled in favor of protecting employees, and this decision would certainly afford employees with more protection. Prudent employers should therefore avoid policies requiring employees to call in to determine whether or not they will be required to work. If doing so is simply not possible, employers should be prepared to pay each employee at least half of his or her normally scheduled work hours or otherwise not impose any discipline for failure to call in or report to work—likely an impractical alternative.
For timely updates on California-specific employment law developments, subscribe to HR Law Talk.