California clarifies reporting time pay for scheduled meetings, split shift premiums
The California Court of Appeal has resolved two frequent questions arising under California’s reporting time pay and split shift premium requirements. The decision in Aleman v. AirTouch Cellular considered whether employers owe reporting time pay to employees on days when employees report just for scheduled meetings. It held that when meetings have been scheduled, employers owe reporting time pay only if the employee works less than half of the scheduled time on those days. The measure is not the usual hours worked by the employee on other days.
On a second point, the court held that California’s split shift pay provision does not require payment of any premium when an employer otherwise pays an employee a total amount greater than the minimum wage for all hours work in a day, plus one additional hour at the minimum wage.
Reporting time pay and scheduled meetings
California is one of a handful of states requiring payment for a certain minimum amount of time as reporting time, or “show up,” pay. The Industrial Welfare Commission wage orders provide: “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 the usual or scheduled day’s work,” with a minimum of two hours and a maximum of four hours set for reporting time pay. Separately, the wage orders also require pay for at least two hours when an employee “is required to report for work a second time in any one workday.”
The case considered a common situation: An employee required to report on a day for a mandatory meeting only. In this case, the employer required employees to report for “store meetings” scheduled for one and a half hours, held once or twice a month on Saturday or Sunday mornings, and before the store opened. The employer scheduled the meetings a week in advance, with the meetings listed on employees’ posted schedules, and time spent at the meetings recorded in the timekeeping system.
Although the meetings always were scheduled and the employee never was sent home from a meeting without working at least half the scheduled time, the employee contended that the employer still had to pay a minimum of two hours of wages. The court rejected this interpretation. Acknowledging the reporting time pay provision is “somewhat lengthy and cumbersome,” the court concluded that there is “only one reasonable interpretation” with respect to “scheduled work.” It is that “when an employee is scheduled to work, the minimum two-hour pay requirement applies only if the employee is furnished less than half the scheduled time.” Thus, for example, an employee who schedules and requires employees to report for a 90-minute meeting, but ends the meeting after only one hour, does not owe reporting time pay. In this situation, the employee has been furnished more than half that scheduled day’s work and is owed nothing more than the wages for that time worked.
The court concluded that the term “usual” in the provision’s “usual or scheduled day’s work” did not require reference to the employee’s usual length of work on other days. In this instance, the employee’s usual day’s work was “immaterial” because the meeting was scheduled. According to the court, the language “usual or scheduled day’s work” refers to two different things: “In order to give each word meaning, a ‘usual’ day’s work must be different from a ‘scheduled’ day’s work – otherwise, the word ‘scheduled’ would be unnecessary.”
Rejecting the Labor Commissioner’s interpretation
The scenario of employers scheduling mandatory meetings on an employee’s day off – and potentially owing reporting time pay – has been common. Until AirTouch, no California case addressed this question. Employers likely had owed a reporting time pay minimum under the Labor Commissioner’s interpretation of the wage orders as stated in that agency’s Enforcement Policies and Interpretations Manual. The court held that to the extent that the Labor Commissioner “would conclude that attendance at a scheduled, mandatory meeting does not constitute a ‘scheduled day’s work,’ such a conclusion would be inconsistent” with the wage order’s language. It further recognized that the wage order’s specific terms “do not reference ‘meetings,’ much less distinguish ‘scheduled meetings’ from ‘scheduled work.’” The court concluded that the Labor Commissioner “is not authorized to write additional terms into the wage order or promote an interpretation inconsistent with its actual terms.”
Employee meetings going forward
The AirTouch decision resolves a significant issue concerning employee meetings. The key points for avoiding reporting time pay are that a meeting be scheduled and that the employee actually work (by attending the meeting or otherwise) at least half of the scheduled time. Employers should take care to schedule meetings in advance when requiring employees to report for a meeting only. They also should plan so that employees work at least half of the scheduled time. Otherwise, if the employer does not satisfy these points, reporting time pay still will be due. In addition, employers also should consider the separate requirement of reporting time pay for a second reporting in a day. In all cases, scheduled or not, an employee must be paid for at least two hours for a second reporting.
Limiting split shift premiums
The decision also clarified California’s split shift premium requirement, another issue which no California decision had addressed. The wage orders define 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.” They further provide: “When an employee works a split shift, one (1) hour’s pay at the minimum wage shall be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment.”
The employee claimed the employer owed him an additional hour of pay each time he worked a split shift. The court rejected this argument. It noted that the placement of the split shift premium within the wage order’s “minimum wages” section, as well as the provision’s references to “the minimum wage,” focus on the minimum wage for a workday, rather than the employee’s regular wage for that workday. Although the split shift provision applies to all non-exempt employees, a premium is due only when the employee’s total earnings for the day are less than the minimum wage, plus an extra hour at the minimum wage. If the total earned is below this amount, the employee would be due the difference as a premium. Otherwise, no split shift premium is due. This interpretation effectively limits the split shift premium to employees working at, or slightly above, the minimum wage.