California Supreme Court Ruling Gives Guidance on Compensable Time Under California ‎Law

On March 25, 2024, the California Supreme Court issued its decision in Huerta v. CSI Electrical Contractors. This ruling provides important guidance as to what does and does not constitute sufficient employer control to make certain time at the job site compensable under California’s Wage Order No. 16.

Wage Order No. 16 applies to employees, like the plaintiff in Huerta, who work in certain “on-site occupations” in the construction, drilling, logging, and mining industries. The Wage Order defines “hours worked,” for which employees must be paid, as “the time during which an employee is subject to the control of an employer and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”

The plaintiff in Huerta works at a solar farm, which has a designated road providing access to the employee parking lots. Along the road is a security gate, at which all employees must undergo security checks. The plaintiff alleged that because of the number of employees entering and leaving the site in the morning and evening, long lines would develop, which resulted in wait times varying from five minutes to over thirty minutes. Additionally, the plaintiff alleged it took 15 minutes of driving to reach the employee parking lots from the security gate. The plaintiff was not paid for the time waiting in line at the security gate or the time he spent driving between the security gate and the employee parking lots. Nor was he paid for his meal periods, even though he alleged that he was prohibited from leaving the premises during that time.

Time Spent Waiting for and Undergoing Security Screening

The California Supreme Court held that during the time the plaintiff spent on his employer’s premises waiting for and undergoing a security check, he was subject to the employer’s control and thus he was entitled to compensation for this time as hours worked under Wage Order No. 16.

The Court concluded that the plaintiff was subject to the employer’s control because he was forced to wait in line in his car, present his badge for scanning, and submit to a visual inspection or possible search of his vehicle. The Court found that all of these tasks could take up to a minute or more per vehicle and took place on the employer’s premises. The Court further noted that these tasks involved a level of employer control beyond an employee merely scanning a badge or using an automated gate on the way onto employer premises. Moreover, it was the employer that required this screening as opposed to a third-party.

Time Spent Driving on Employer Property

Wage Order No. 16, section 5(A), states: “All employer mandated travel that occurs after the first location where the employee’s presence is required by the employer shall be compensated at the employee’s regular rate of pay.”

In Huerta, the plaintiff alleged he was required to drive to and from the security gate and employee parking lots while obeying certain “rules of the road,” including speed limits and a prohibition on passing other drivers, stopping on the road, smoking, or using ear pods. The plaintiff was also subject to employer mandated policies during the drive, such as the employer’s policies against discrimination and harassment.

The Court held that “[a]lthough these rules curbed Huerta’s freedom of action while traveling between the Security Gate and the parking lots, … they do not amount to a level of control sufficient to render the travel time compensable as ‘hours worked.’”

However, the Court also stated that if the security gate was a location where the employee’s presence was required, which the Court did not decide but deemed likely to be the case, then the plaintiff would be entitled to pay for “employer mandated travel.”

Restrictions on Employee Activity During Meal Breaks

Finally, the Court ruled that the employer’s restrictions on the plaintiff and other employees during their meal breaks entitled them to compensable time as hours worked. The Court stated that “an employee must be paid a minimum wage for meal periods when an employer’s prohibition on leaving the premises or a particular area forecloses the employee from engaging in activities he or she could otherwise engage in if permitted to leave.” In this regard, the Court noted that “[a]lthough a meal period’s limited duration may impose some practical limitations on employees’ freedom of movement, employees must retain the freedom to use the time ‘for their own purposes’ if a meal period is to qualify as off-duty.” This includes “feasible personal activities,” such as “being allowed to return to one’s vehicle or take a walk”.

Here, given the employer’s restrictions, the California Supreme Court ruled that this standard was clearly not met.

Takeaways

In light of these holdings, employers should review their security and safety procedures and any limitations placed on employees during uncompensated time.

In order to avoid down time on the job for employees and avoid related wage payments for hours worked or traveled, employers subject to Wage Order 16 should ensure that security checkpoints are minimally intrusive while still accomplishing their security goals. Moreover, employers should consider placing the location where their employees’ presence is first required in an area that minimizes employer mandated travel.

Employers should also implement proper screening and clock-in/out procedures that minimize the burden on employees in order to avoid exerting a level of control over employees that rises to the level of hours worked.

Finally, all employers, even if they are not subject to Wage Order No. 16, should take care to allow employees the freedom to use their meal breaks for their own purposes and limit the restrictions on employee’s activities or movement during meal breaks.