California Court Rules That "Reporting Time Pay" Owed Even If Employees Are Not Required to Physically Report To Work
Employers in industries with fluctuating daily labor needs, such as retail services, often require employees to call in ahead of a scheduled shift to find out whether they are needed to work. According to a recently-published California Court of Appeal decision, employees who are required to use such a call-in procedure may be entitled to "reporting time pay" if they are told not to come to work that day—even if the employees do not physically report to work. This decision calls into question a common scheduling practice used by employers in various industries, and warrants close review of your company's scheduling practices.
In Skylar Ward v. Tilly's, Inc., issued on February 4, 2019, a former employee sued retail clothing store Tilly's over its practice of "on-call" scheduling. Tilly's assigned its employees to mandatory "on-call" shifts and required them to call in two hours before these shifts in order to find out if they should actually come in to work. If they were told to come in, they were paid for working the shift; if not, they received no compensation for being "on-call."
The plaintiff alleged that this practice violated the "reporting time pay" requirement contained in Section 5 of California Industrial Wage Commission Wage Order 7. This section, which is also contained in the other Wage Orders from 1 -16, mandates that employers pay employees for each "workday an employee is required to report for work and does report, but is not put to work or is furnished with less than half of his or her usual or scheduled day's work." Reporting time pay constitutes "half the usual or scheduled day's work, but in no event for less than two hours nor more than four hours, at his or her regular rate of pay."
In response, Tilly's argued that the phrase "report for work" requires an employee's physical presence at the workplace at the start of a scheduled shift. According to Tilly's, since the employer had only required employees to call in two hours before the start time, employees had not been required to "report for work" and therefore were not entitled to reporting time pay.
In a decision that could potentially affect scheduling practices throughout the state, the Court concluded that an employee need not physically appear at the workplace in order to "report for work." Instead, "reporting for work" is defined by the employer's direction as to the manner in which the employer must present himself for work, whether by calling in, logging on to a computer remotely, setting out on a trucking route, or some other method. If the employer directs an employee to "report" in a particular manner for a scheduled shift, reporting time pay is required if the employee is thereafter not actually put to work.
The Court specifically limited its holding to employer requirements that employees call in two hours before the start of a shift and are not put to work. The Court also found it significant that Tilly's call-in requirement imposed "significant limitations" on how employees could use their time before and during on-call shifts: "On-call shifts burden employees, who cannot take other jobs, go to school, or make social plans during on-call shifts—but who nonetheless receive no compensation from Tilly's unless they ultimately are called in to work. This is precisely the kind of abuse that reporting time pay was designed to discourage."
In light of the fact that Tilly's was a 2-1 decision and conflicts with at least one federal district court case,1 we anticipate an appeal to the California Supreme Court. In the meantime, California employers should carefully review any "call-in" scheduling practices with their Hanson Bridgett attorney.
1 Culley v. Lincare Inc. (E.D.Cal. 2017) 236 F.Supp.3d 1184, 1190 (interpreting the phrase report to work" to mean physically reporting).
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