The California Court of Appeals recently issued a decision in Ward v. Tilly’s, Inc. holding that employers are required to pay employees “reporting time pay” when the employees are required to call in ahead of a shift to determine whether or not they need to work, and are then told not to come in.
This decision compliments California’s history of protecting the rights and interests of employees, given that courts are often sympathetic to employee’s interests. The Industrial Welfare Commission (IWC) formed in 1913 due to concerns over inadequate wages and poor working conditions. As part of this, Wage Order 7 applies to Merchantile Industries and requires “reporting time pay” for non-exempt employees when an employee reports for work, but is not put to work. Section 5 of this Order states that “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, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage.”
One issue with interpreting Wage Order 7 is that it failed to provide a definition of “reporting to work.” Notably, Ward v. Tilly’s holds that “reporting to work” does not require physical presence.
In Ward, Plaintiff, a retail store employee, was required to call in two hours before an on-call shift to determine whether or not she was needed at work that day. If the employee was needed, she was paid. If she was not needed, she received nothing. Plaintiff filed a putative class action lawsuit alleging that non-exempt retail employees are to be paid “reporting time pay” when they call in for work but are not needed. Plaintiff argued that calling in to work was “reporting to work” and therefore Wage Order 7 required reporting time pay.
Tilly’s argued that reporting to work meant physical presence, and therefore an employee calling to see if he or she was needed was not “reporting to work” and thereby did not trigger the pay requirements of Wage Order 7. The Court disagreed with Tilly’s, reasoning that employers control how employees report to work, and here Tilly’s required a phone call two hours prior to the start of the shift, meaning the call was reporting to work.
The requirement to call in dictates what employees could or could not do before their shifts. It prevented them from participating in other activities such as sleeping, attending classes, or being away from cell-phone reach. The Court stated that the purpose of the order was to (1) compensate employees and (2) encourage proper notice and scheduling. Employers are encouraged to project their own labor needs and the law compensates employees for the inconvenience of calling in.
The Court did not specify a timeframe employers are required to give to avoid reporting time pay. Nonetheless, as employers control what “reporting to work means” (in this case, it was calling in two hours prior to an on-call shift), employers should review their own reporting to work requirements to ensure they are compliant with the Ward decision.