California: IMPORTANT – Significant Changes to Reporting Time Pay

In Ward v. Tilly’s, Inc., the California Court of Appeal stated that employees required to call in two hours before a shift starts, to see whether or not they need to report to work, must be paid a minimum of two hours of work even if the employee is told they do not need to report for work.

Although this case dealt with the reporting time requirements stated in Wage Order 7, most wage orders set forth rules on when reporting time pay is required to be paid; usually, it is based on an employee who is “required to report for work and does report, but is not put to work” or works less than half the scheduled day’s work. Specifically, in this scenario, the act of calling in for a mandatory on-call shift is considered “reporting to work” or “presenting oneself as ordered.” Because of current technological capabilities, reporting to work does not just mean physically reporting. Rather, it means where “an employer directs employees to present themselves for work,” whether it’s in person, via phone, logging onto a computer remotely, appearing at a client’s job site, or setting out on a trucking route.

The court stated that “on-call shifts significantly limit employees’ ability to earn income, pursue an education, care for dependent family members, and enjoy recreation time.” Additionally, employees’ “activities are constrained not only during the on-call shift,” but also the pre-shift time they are required to call in as well. Moreover, “if an employer limits the kinds of activities employees can engage in during off-duty time, they are not truly off-duty.”

The court clarified some concerns about its interpretations. Specifically, if an employee calls in before a shift, is told to report, and then does not report, no reporting time pay is due because the employee was not “denied the opportunity to work.” Additionally, it limited its interpretation to the facts of this case, where employees were required to call in two hours before an on-call shift and were disciplined for failing to call in. What is troubling is that it is unclear if this case will be applied retroactively. Going forward, employers should take a close look at their scheduling practices for compliance with this new ruling.