June 25, 2019

June 25, 2019

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June 24, 2019

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Reporting for Duty: In California, It’s Compensable, Even When Employees are Told Not to Come to Work

Last week’s decision in Ward v. Tilly’s Inc. means that California employers with on-call policies are required to pay a minimum of two hours reporting time pay, even if the employee is told there is no need to come into work that day.

A California Court of Appeal held that a company’s on-call scheduling policy requiring employees to call the employer in advance of a shift to find out if they need to appear for work triggered “reporting time” pay obligations under the California Industrial Welfare Commission’s (IWC) Wage Orders.

Under the Wage Orders, an employee who is required to report for work and does report must be paid for half the employee’s usual or scheduled day’s work, but in no event less than two hours’ pay, nor more than four hours’ pay, at the employee’s regular rate of pay.

On-Call Policy Giving Rise to Employee’s Claim

In Ward, a retail employer, Tilly’s, required its employees to be available to work on-call shifts. The policy required an employee to call two hours before the start of an on-call shift to determine whether Tilly’s needed the employee to work that shift. Tilly’s instructed employees to assume they were required to work their on-call shifts unless they were told they were not needed. If Tilly’s did not need an employee to work an on-call shift, the employee was not paid. Tilly’s disciplined employees for failing to call in, calling in late, or refusing to work an on-call shift. This discipline was similar to the discipline imposed for missing regular, in-store shifts.

Ward, a Tilly’s employee, brought a class action lawsuit alleging that Tilly’s violated the Wage Order’s reporting time pay requirements. The trial court dismissed the complaint, holding that those requirements do not apply unless the employee physically shows up to report for work at the workplace.

What “Reporting for Work” Means

The California Court of Appeal reversed the trial court’s decision, with the majority holding that “an employee need not necessarily physically appear at the workplace to ‘report for work.’ Instead, ‘report[ing] for work’ within the meaning of the Wage Order is best understood as presenting oneself as ordered.” Tilly’s required its employees to “report for work” by calling in at least two hours before the on-call shift, triggering the Wage Order’s reporting time pay requirements.

But the dissent in Ward concluded that the legislative history of the Wage Order supported the trial court’s interpretation, which would have limited reporting time pay to those circumstances in which an employee physically appears at the place of work. The dissent agreed with a California federal court’s conclusion that “call-in shifts do not trigger reporting-time penalties, even if the scheduling practice is inconvenient and employee-unfriendly.”

Takeaways

While it is possible that Ward will be reviewed by the California Supreme Court (particularly in view of the vigorous and well-reasoned dissent), it is far from clear that such review will occur; nor is it clear how the California Supreme Court would resolve the issue. Prudent California employers should review their on-call policies in light of Ward, and consider modifying mandatory pre-shift call-in obligations in order to avoid triggering reporting time pay requirements.

© 2019 Schiff Hardin LLP

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About this Author

William J. Carroll, Schiff Hardin, Labor and Employment Lawyer, Attorney
Partner

William J. Carroll has concentrated in labor and employment law for almost 25 years, representing employers in trial and appellate courts, and before a wide range of state and federal agencies. His practice encompasses all aspects of employment law, including counseling on the many compliance challenges facing California employers, and litigating employment matters ranging from individual arbitration claims to multi-party class actions.

415-901-8754
Paul Newendyke Labor & Employment Attorney
Associate

Paul has worked in a number of practice areas including labor and employment, employee benefits and executive compensation, general corporate matters, and general civil litigation. He has also served as a judicial intern in federal and state courts and draws on this judicial experience in analyzing the best solutions for specific client issues. Paul’s background in policy analysis gives him the insight to efficiently analyze and interpret the policies of statutes, which allows him to better assist his clients.

EDUCATION

  • Indiana University Maurer School of Law, J.D., 2018
    Order of the Coif
    Michael S. Maurer Merit-Based Full Scholarship Recipient
    Labor & Employment Law Student of the Year Award, Ogeltree Deakins
    Access to Justice Program Pro Bono Award, Faegre Baker Daniels

  • Indiana University, M.S., Public Affairs in Policy Analysis & Non-Profit Management, 2018

  • Grand Canyon University, B.S., Sports Management and Justice Studies, 2013, summa cum laude

BAR ADMISSIONS

  • Illinois

312-258-5652