California Supreme Court Reaffirms That Employees Must Be Paid For “All Hours Worked” Including Hours On-call

On January 8, 2015 the California Supreme Court clarified the standard for “all hours worked” in California.  In an opinion in support of California employees, the Court held that employees must be compensated for “all hours worked” at statutory minimum wage or overtime rates.  In Mendiola v. CPS Security, Inc., the California Supreme Court clarified that a two-pronged standard applies to determining what is “work” and that “work” includes time spent on-call to respond to any emergencies.

CPS Security provided on-site guards at construction sites.  The guards were  required as part of their employment  duties to be on-call to respond to emergencies and to sleep in trailers placed at the sites.   The Supreme Court found that the guards’ on-call and sleep time both met the definition of “hours worked” under California law and therefore had to be paid.

The Supreme Court reiterated that California has two separate and independent tests under which time may be defined as “hours worked”  (1) time during which an employee is subject to the control of an employer’ and (2) ‘time the employee is suffered or permitted to work, whether or not required to do so’.“

Applying the first standard, the Court found that the guards were entitled to pay because they were required to stay at the job site during their on-call hours.    As to the “permitted to work” test, the Court found that the threshold question is whether the time is “primarily for the benefit of the employer and its business.”  The guards were entitled to compensation under this test as well because their on-call time was directly connected to their employer’s “business model” and the service being offered to its clients.

These clarified standards make it clear that any time involving required attendance at a job site, or that effectively precludes personal activities, or that directly relates to the employer’s “business model,” will likely be considered “work” and require payment of wages under California law.

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