In an employer-friendly decision, the California Court of Appeal recently clarified the obligation of employers to pay “reporting time pay” and “split shift premiums.” In Aleman v. AirTouch Cellular, 2011 WL 6383963 (Cal. Ct. App. 2011) the court held that employers are not required to pay employees who report to work for prescheduled meetings provided they work and are paid for at least half of the scheduled time. The court also held that employees who work split shifts are not entitled to additional compensation provided they earn at least the minimum wage for the hours worked plus one additional hour at the minimum wage.
Reporting Time
At issue was whether AirTouch properly paid an employee for attending weekend meetings that lasted an hour to an hour and a half. The meetings were scheduled in advance and listed on the employee’s work schedule, which was posted at least four days before the work week began. The employee stipulated that he always worked at least half of the scheduled period and received his regular pay for the meeting time. Nevertheless, he maintained that the Industrial Welfare Commission’s Wage Order 4 required AirTouch to pay him for at least two hours as reporting time pay in addition to his regular wage. The employee relied on Wage Order 4, which provides:
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 said employee’s usual or scheduled day’s work, the employee shall be paid for half of the usual or scheduled day’s work, but in no event for less than two hours nor more than four hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage.
The court held that reporting time pay is only required if an employee works less than half of his usual day’s work or his scheduled day’s work. Explaining that the words “usual” and “scheduled” have two different meanings, the court concluded that a “scheduled” meeting does not refer to an employee’s regular work hours and thus does not require a minimum of two hours pay.
The court noted that it appeared that the California Division of Labor Standards Enforcement (“DSLE”) had opined that employers must pay employees reporting time pay for a meeting, even if the meeting was scheduled in advance. The court, however, found this interpretation inconsistent with the language of the Wage Order and explained that it “need not get caught up in guesswork” because it is not bound by DLSE interpretation.
Split Shifts
Wage Order 4 defines a split shift as “a work schedule, which is interrupted by non-paid non-working periods established by the employer, other than bona fide rest or meal periods.” For example, an employee works a split shift if he works the breakfast shift from 7:00 to 11:00 a.m. and then the dinner shift from 5:00 to 9:00 p.m.
The Wage Order requires that an employee working a split shift is entitled to “one hour’s pay at the minimum wage ... in addition to the minimum wage for that workday.” The employee in Aleman argued that he was entitled to an additional hour of pay for a split shift regardless of whether he received more than the minimum wage for the entire shift plus an extra hour.
The court found that the language of the Wage Order clearly emphasizes the minimum wage, particularly because it is located in the “Minimum Wage” section. In finding for AirTouch, the court held that an employee is only entitled to a split shift premium if he makes less than the minimum wage for his hours worked plus an additional hour at minimum wage.
For example, taking the current California minimum wage of $8 an hour, an employee making minimum wage who works an eight hour split shift would be owed $72 ($64 for hours worked + $8 split shift premium). However, if the employee earns $9 an hour, no split shift premium would be required because the employee earns $72 for his eight hours of work, which equals the minimum wage for eight hours plus the one hour minimum wage split shift premium. If, however, the employee earns $8.75 an hour and works a total of eight hours, the split shift wage is partially offset ($8.75 X 8 = $70), so the employer must pay the employee an additional $2 so he earns $72 for the day.
Significance for Employers
To avoid paying reporting time for meetings that are not scheduled during employees’ regular work hours, employers should schedule the meetings in advance and make sure the meeting runs at least half of the scheduled time. Employees who do not receive adequate advance notice should continue to receive reporting time pay. Although the court did not opine on what constitutes adequate notice, it considered four days sufficient.
With respect to split shift premiums, employers should ensure that employees who work split shifts earn at least the minimum wage times the numbers of hours worked plus one additional hour at minimum wage.
This article was originally published by Bingham McCutchen LLP.