Our state is known for its wide-reaching employee protections. A recent Court of Appeal case illustrates this in the context of a department store that required retail employees to call in two hours before possible on-call shifts to see if they had to report in person.
In the February 4 decision Ward v. Tilly's, Inc., Tilly's assigned its employees on-call shifts, but required them to call in two hours before their scheduled on-call shift to see whether they should actually come in to work. If they were told to come in, they were paid for their shifts; if not, they did not receive any compensation for having been "on-call."
Sales clerk Skylar Ward brought a class action lawsuit against Tilly's, claiming that when on-call employees contact Tilly's two hours before on-call shifts, they are reporting for work and should be paid reporting time pay. She argued that the applicable state labor regulations, encompassed in the Industrial Welfare Commission's Wage Order 7 governing mercantile employers, required that Tilly's pay on-call employees for their on-call time as covered "reporting time" even when they were not required to report to the store in person.
Wage Order 7 requires that an employer pay wages when an employee is "required to report for work and does report, but is not put to work." Here, the issue was whether "report for work" covers the kind of call-in arrangement Tilly's required of its workers.
The Court of Appeal agreed with Ward, concluding that Tilly's on-call scheduling triggered the "reporting time pay" requirements of Wage Order 7.
First, the Court looked deeply into the history of the Wage Order and noted that Wage Orders are construed liberally in support of employee protection. It concluded that the word "report" was not conclusive because its definitions vary as to whether it requires being at a physical place, with some definitions referring to readiness in general.
Second, the Court recognized that even though the Industrial Welfare Commission (IWC) did not consider the possibility of checking in by telephone instead of in person when the Wage Order was adopted in the 1940s, the California Supreme Court has made it clear that the proper question is instead what the lawmakers would have likely thought of an unanticipated technological advance in light of the original purpose of a law.
The Court concluded that the original goals of the reporting time pay provisions were to "compensate employees" and "encourage proper notice and scheduling" in the context of employers that were requiring workers to physically report to work with no guaranty of work. Instead, these employees had to absorb the cost of transportation to the workplace and use significant personal time, uncertain whether they would be paid. The Court noted that because of the possibility of having to report to work, an on-call employee had to arrange possible care for children or elderly family members and forego other activities, including earning other income, and other work or educational opportunities as well as family or leisure time, all creating "stress and strain" on the family. It found that the IWC would have agreed that the reporting time pay requirement should apply to the Tilly's phone-in requirements.
The Court explained that reporting time pay puts pressure on employers to properly plan for labor needs and scheduling. In short, it found that the reporting time pay requirement covers not only the original purpose of paying employees who must report physically for a possible on-call shift, but also the scenario of requiring phone or computer contact or some other off-site act like beginning a truck route or going to some other site.
Employers who have on-call employees should review their policies and practices to make sure they are legally compliant. The attorneys at Duggan Law Corporation are available to assist employers with navigating the laws around on-call scheduling and other workplace matters.