In July, the California Supreme Court announced that various provisions of the Labor Code and the IWC Wage Orders did not incorporate the de minimis doctrine. According to that doctrine, some alleged wrongs are so trivial or hard to measure that courts will disregard them. The de minimis doctrine applies to the federal Fair Labor Standards Act, so under that law, employers can disregard small amounts of time (a few minutes) in calculating what employees are owed. The California Supreme Court announced, however, that that was not the case under corresponding state laws.
On August 29, 2018, the court slightly modified its earlier opinion, stating that:
“The opinion herein is modified as follows: The final paragraph of the opinion … is modified to read: We hold that the relevant California statutes and wage order have not incorporated the de minimis doctrine found in the FLSA. We further conclude that although California has a de minimis rule that is a background principle of state law, the rule is not applicable to the regularly reoccurring activities that are principally at issue here. The relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off the clock without compensation. We leave open whether there are wage claims involving employee activities that are so irregular or brief in duration that employers may not be reasonably required to compensate employees for the time spent on them. The petition for rehearing is denied.” (emphasis added)
The reference to “reoccurring activities” and employees “routinely” working for minutes off the clock indicates that the court is addressing situations where employees are required to perform some off-the-clock work on a repeated or regular basis, such as closing shop or shutting down systems. So a different rule may apply to activities that are more irregular or isolated. In fact, the court said as much in its earlier version of the opinion by noting that there may be employee activities “where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.” The more recent modification simply clarifies that that is still the case.
Our recommendations for employers remain the same:
- Do everything possible to ensure that employees don’t clock out until they’ve completed all work-related tasks. This includes security checks, closing shop, and exiting the work premises.
- If you use fixed time clocks, locate them as close as practicable to the exits. Or better yet, look at more advanced systems that employees can operate remotely, The court specifically referred to “advances in technology … shaping our understanding of what fractions of time can be reliably measured.”
- Ensure that whatever policy you use to round off workers’ time entries is facially neutral (i.e., you’re just as likely to round up as to round down).
- Require non-exempt employees to report any time they work after hours. Seemingly trivial tasks like checking e-mail or an online schedule could be compensable.
- Train managers on how and when to communicate with non-exempt staff after hours.
- If employees do after-hours work without authorization, discipline them, but pay for the time.
Is this modification good news for employers? No. But it may be slightly less awful than it was before.