The California Wage Orders require that employees be paid for “all hours worked.” Mendiola v. CPS Security, a California Supreme Court opinion issued yesterday, addressed how to treat 24-hour security guards at construction sites when they were sleeping in their trailers.

Under federal law, the time would not need to be paid. But here in California, as we’ve mentioned once or twice, the rules are different. The court noted that Wage Order 5, for public housekeeping workers (which includes hospitals), incorporates aspects of the federal standard. But this case arose under Wage Order 4 (for professional, clerical, and similar occupations), which did not incorporate that same standard (except for certain healthcare workers). The court concluded, therefore, that sleep time must be paid. In doing so, it overturned a line of state appellate decisions that said the parties could agree that sleep time would not be paid.

Before you think that courts are insensitive to the difficulties California employers face in trying to determine what law applies, consider this passage from a footnote: “We acknowledge CPS’s efforts to ascertain whether its policy complied with California’s labor laws and recognize the difficulty it and other employers can face in this regard.” But it didn’t change the court’s decision one iota. The court not only decided that sleep time had to be paid in these circumstances, but explicitly made its ruling retroactive. So now other employers who complied with the law as it was understood before yesterday are subject to claims (including class actions) by their own current and former employees who were not paid for sleep time.

Here’s a copy of the Mendiola Opinion (pdf) and two takeaways:

1. Don’t think that you’re immune from California wage and hour claims just because you comply with federal law. Nothing could be further from the truth.
2. If you have employees who sleep at work, it’s time to reevaluate whether and how they need to be paid for that time.