Employers Beware ….“On-Call” Time May Be Considered Paid Time

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In a recent California Court of Appeal decision, the Court held that employees scheduled for “on-call” or “call-in” shifts may be entitled to “reporting time pay” even if the employee does not physically report to work.

Summary of the Facts

The employer, Tilly’s, is a retail operation. The employees were assigned both “regular” shifts where they actually reported to work, and “on-call shifts” where the employees were required to call in two hours before their shifts were scheduled to start to confirm if they were to actually report to work. If told to report, they were paid for the shifts; if told do not report, the employees were not paid.

The employees were scheduled in three different ways for the “on-call” shifts:

  • Both a regular shift and an “on-call” shift were scheduled in the same day; the regular shift was scheduled before the “on-call” shift. During the regular shift the employee would be notified if they would be needed for the later on-call shift extending their workday. (e.g. A regular shift would be worked from 10:00 a.m. to 4:00 p.m. and the “on-call” shift would be from 4:00 p.m. to 6:00 p.m.).
  • Both a regular shift and an on-call shift were scheduled in the same day, but the “on-call” shift was scheduled before the regular shift. Employees were required to call in two hours before the “on-call” shift (or by 9:00 p.m. the night before for any shift beginning before 10:00 a.m.). (e.g. Employee is scheduled for an “on-call” shift from 10:00 a.m. to 1:00 p.m. and a regular shift from 1:00 p.m. to 5:00 p.m.). If they were not required to report early they worked their regular shift.
  • Only an “on-call” shift was scheduled and employees were required to call in two hours prior to the start of their potential shift. (e.g. Employee is scheduled for an “on-call” shift from 10:00 a.m. to 2:00 p.m. and had to call in by 8:00 a.m.)

The Plaintiff sued to challenge the “on-call” scheduling policy asserting the employees should be compensated for the time spent “on-call”.

“Reporting Time Pay”

The California Department of Industrial Relations Wage Order, which regulates wages, hours and working conditions provides (specifically Wage Order 7 regulating the retail industry) at Section 5 that employees are to be paid for “reporting time pay” for each workday the employee is required to “report to work” and does report, but the employee is then not put to work or is given less than half of the employees usual or scheduled day’s work.

Section 5 of Wage Order 7 also provides that the amount of the reporting time pay is either one half of the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage.

What Does “Report for Work” Mean:

The issue before the Court was what does “report for work” really mean? The employer argued that meant actually going to the worksite and performing the job.  To the contrary, the employee argued that “report to work” should include any type of “reporting” in– including, calling in or checking a schedule on-line.

The Court agreed with the Plaintiff and interpreted “report for work” broadly to mean “presenting oneself as ordered”. The Court stated: “[O]n-call shifts burden employees, who cannot take other jobs, go to school, or make social plans during on-call shifts, but who nonetheless receive no compensation from Tilly’s unless they ultimately are called in to work. This is precisely the kind of abuse that reporting time pay was designed to discourage.”

The Court explained if an employer directs employees to present themselves for work by physically appearing at the workplace at the shift’s start, then the reporting requirement is triggered by the employee’s appearance at the job site. But if the employer directs employees to present themselves for work by logging on to a computer remotely to determine their shift, route or other work assignment, then the employee “reports for work” by those actions.

The Court further clarified that in this instance, the phrase “does not have a single meaning, but instead is defined by the party who directs the manner in which the employee is to present himself or herself for work—that is, by the employer.” With the Court’s decision, it is possible that the term could have two meanings depending on the circumstances:

1) Physically Reporting to Work; “On-call” time would need to be paid if an employer requires its employees to physically report for work at the job-site, but then if they are then sent home.

2) Not Physically Reporting to Work: If an employer requires its employees to “present” themselves for work by calling in, checking a schedule on-line or some other remote method, then reporting time would need to be paid, even if they are told not to report.

The rationale behind the Court’s decision was two-fold: (1) to properly compensate employees, and (2) to encourage proper notice and scheduling by employers.

This case is a departure from the general rule that “on-call” pay is only required if the employee is restricted in his or her activities while on-call (e.g. must be able to report to work within a 30 minute time frame, must return a call within 10 minutes, must not consume alcohol in case they might need to report to work, etc.)

The one issue left open is whether this ruling is to be applied prospectively or retroactively – leaving California employers who use a similar “on-call” scheduling policy to wonder if they have potential exposure.

What Should I Do Now
  • Review current policies and determine if any employees who are “on-call” should be compensated with “reporting time pay”.
  • Have managers call the employees to notify them if they are required to report to work or not when they are “on-call”.

Ward v. Tilly’s, Inc.

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