HR Legal Update: Recent Case Paves Way For Employees to Be Paid for Every Minute Worked (Literally)

COURT SAYS CALIFORNIA WAGE & HOUR LAW DOESN’T RECOGNIZE FLSA DE MINIMIS RULE

On July 26, 2018, the California Supreme Court ruled that an ex-Starbucks employee’s putative class action lawsuit on state wage claims is not barred by a federal standard limiting lawsuits seeking pay over small increments of unpaid time.  The ex-Starbucks worker claimed he was entitled to payment for 12 hours and 50 minutes of time over a 17-month period in which he spent minutes off-the-clock closing his store, including shutting down the computer system, locking the doors and taking care of last-minute tasks.  The court held that relevant California statutes and wage orders have not incorporated the de minimis doctrine found in the Federal Labor Standards Act (FLSA), which excuses payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.  Thus, the ex-employee was allowed to continue his claim in California despite the FLSA standard to the contrary.

While the ex-employee is only requesting approximately $102.67 in total compensable, the California Supreme Court made it clear the amount can be substantial to some, stating “That [amount] is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares.”  It is no secret California has continued to trend toward more employee-protective laws, including when it comes to wage and hour disputes, but that does not mean employers and HR personnel across the country should not take note of this ruling and make adjustments. 

EMPLOYERS & HR TAKE NOTE TO CHANGES TO FLSA DE MINIMIS DEFENSE

While California employers may be the only ones directly affected by this case, pending the ultimate outcome after appeal, it will likely set the stage for many other lawsuits on the same premise. It is possible other state courts will utilize the California Supreme Court’s roadmap and require every minute worked, whether clocked in or not, to be compensable.  Even though the federal rule suggests this time may be de minimis and employers do not have to compensate employees for such time, employers and HR personnel would be remiss if they did not learn from this ruling and use it as an important reminder to review their company’s time clock management system and policies, even when it is only minutes before or after an employee has clocked in or out.  Don’t get caught scrambling when this issue comes to your state, start reviewing and adjusting your policies and time management systems now.

If you have questions or would like help reviewing and updating your policies and time management systems, please contact your Thompson Coe attorney at (651) 389-5000 or at myHRgenius@thompsoncoe.com.  You can also find helpful information and previous tips touching on this topic and more at https://myhrgenius.co/.

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