California: De Minimis Time Just Got Smaller – A New Wage and Hour Challenge

APPLIES TO

All Employers with CA Employees

EFFECTIVE

July 26, 2018

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Employers should take immediate action!  Recently, in Troester v. Starbucks, the California Supreme Court stated that 4-10 minutes of time worked on a regular basis after clocking out must be compensated. Historically, federal law and the California Division of Labor Standards Enforcement stated that employers do not have to pay employees for small amounts of time irregularly worked off-the-clock, where the administrative burden in recording such time is impractical or unreasonable. This de minimis time covers brief pre-shift or post-shift tasks, such as when turning on a computer or locking up. However, California employers may not be able to rely on the de minimis doctrine any longer.

There, Troester brought a class action against Starbucks claiming that he was not paid for the average 4-10 minutes it took him to close the store each shift after clocking out for the day. While the Fair Labor Standards Act (FLSA) allows for compensable time to go unpaid where the time is so small as to be administratively difficult to record, the California Labor Code and wage orders require that employees be paid for “all hours worked.” Moreover, the Court noted that the closing tasks were part of Troester’s regular responsibilities, not an irregular or rare occurrence.

Interestingly, the Court did not say that the de minimis doctrine could never be applied; however, it did not provide clear guidance on what those circumstances may be. The Court stated that the de minimis rule referred to “uncertain and indefinite periods of time involved of a few seconds or minutes duration, and where the failure to count such time is due to considerations justified by industrial realities.” Current technology that allows employees to clock out from a smartphone or app may make justifying de minimis time difficult for any period worked after clocking out. More specifically, “[a]n employer may not arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time or practically ascertainable period of time he is regularly required to spend on duties assigned to him.”

Because little room has been left to rely on the de minimis doctrine going forward, employers must take care to compensate employees for all time worked. Even more problematic, Troester may be applied retroactively. At-risk employers should seek legal review for potential corrections.

Action Items

  1. Review and update timekeeping practices for compliance with this new ruling.
  2. Have timekeeping policies updated consistent with the new ruling.
  3. Have managers trained on timekeeping requirements.
  4. Consult with legal counsel for wage and hour corrections.
  5. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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