Working “off the clock” usually starts with an employee performing some small task that takes just a few minutes…taking a quick after-hours call from their supervisor, making a work-related call on their commute to/from work, sending or responding to a text after hours, deciding to quickly finish what they are working on and skipping their meal or rest break, or logging onto the employer’s portal to check their schedule each day or week.
For remote workers, the potential to perform “off the clock work” is even greater.
These actions seem minor and are usually not documented on the employee’s time record. However, in California, those “few minutes” can become the foundation of litigation.
What Is “Off-the-Clock” Work?
“Off-the-clock work” occurs when a non-exempt employee performs work without recording their time and hence not being paid.
What Are the Potential Claims?
When an employee works “off the clock”, those “few minutes” can result in claims for unpaid wages, overtime, missed meal and rest periods, inaccurate wage statements, waiting time penalties, and claims under the Private Attorneys General Act (PAGA) or a class action claims.
1. Unpaid Wages and Overtime Compensation
As is well known, employees must be paid for every minute worked, not simply the hours they are scheduled to work. If the time is not recorded, the employee is not being paid. Also, additional time worked, whether just a few minutes or even seconds, can add up, which can result in daily or weekly overtime obligations.
All such time, no matter how small or insignificant, must be compensated at the appropriate rate of pay, so it is imperative that employees are notified to record all time “worked.”
In the landmark California Supreme Court case of Troester v. Starbucks Corp., an employee working in a retail location alleged he regularly spent a few minutes after clocking out performing closing activities, including transmitting sales information, activating alarms, and locking store doors. Although the unpaid time involved only a few minutes per shift, the California Supreme Court held that California employers generally must pay employees for all time worked, even when the time appears administratively difficult to record or seemingly insignificant. The court emphasized that with modern timekeeping technology it is feasible to capture small increments of work time.
2. Meal and Rest Break Violations and Penalties
Meal and rest break violations remain among the most heavily litigated wage and hour issues in California. The risk for “off the clock” claims can arise when employees:
- Continue to work during their schedule meal and/or rest breaks;
- Respond to calls, texts, or emails during meal or rest periods;
- Skip breaks because the workload is too heavy or they are trying to meet a deadline;
- Are required either expressly or impliedly, to remain available during the meal/rest break;
- Are not permitted to leave the employer’s premises.
Meal and rest breaks must not only be taken timely but must also be duty-free and uninterrupted for the entire duration of the meal/rest break period to be compliant. Any missed, short, late or interrupted meal period or rest break can create liability and trigger meal or rest period penalties. The penalty payment of one hour of the employee’s hourly rate of pay must be paid in the pay period in which the violation occurred.
Employee must be trained to record all time spent during what should have otherwise been their meal or rest breaks.
3. Wage Statements, Final Pay, and Waiting Time Penalties
Once an employee asserts a claim for “off the clock” work, employers may also face exposure for other related claims arising from the failure to pay employees for all hours worked including:
- Inaccurate wage statements
- Final paycheck violations
- Waiting time penalties
Employers must strictly comply with the time-frame for providing final pay.
- Pay Upon Termination: Employees who are terminated must receive their final wages (including all earned but unused vacation or PTO) at the time of termination.
- Pay Upon Resignation: Employees who voluntarily resign are required to be provided with their final wages within 72 (consecutive) hours (including weekends) of the receipt of their notice of resignation. If more than 72 hours’ notice of resignation is given, the employee must be provided with their final wages on their last day of employment.
Failure to timely pay final wages can result in a claim for “waiting time penalties” pursuant to Labor Code Section 203 which provides for the recovery of the employee’s daily wage rate for each day they are not provided with their final wages, up to 30 calendar days.
For example, if an employee earns $20/hour and regularly works an 8 hour day their daily wage rate is $160. The employee is fired on May 1st but their final wages are not paid until the next regular payday on May 15th; the employee is then entitled to seek the recovery of $2,400 in waiting time penalties.
EMPLOYER BEST PRACTICES TO AVOID OFF THE CLOCK CLAIMS
In order to avoid or minimize the risk of a “off the clock” work, and related claims, employers need to be vigilant and implement best practices:
- Review timekeeping practices to identify unrecorded work before or after shifts;
- Train supervisors and managers not to request work from non-exempt employees before or after their shift – but if required, to log back in and record their time;
- Audit meal and rest break compliance and investigate recurring missed, short, late or interrupted breaks and pay any penalty due.
- Establish clear expectations for after-hours communications, especially with non-exempt employees;
- Conduct payroll and wage statement audits to ensure all compensable time is captured;
- Evaluate remote and hybrid work practices to reduce off-the-clock risk;
Employers that proactively address off-the-clock work issues through policies, training, accurate timekeeping and manager accountability can minimize the risk of costly litigation.
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