A recent ruling by the California Supreme Court could have lasting consequences for timekeeping practices and the payment of wages for hourly employees. In the case of Troester v. Starbucks Corp., the court ruled on July 26, 2018 that Starbucks had to pay the plaintiff for time spent on regular, off-the-clock tasks. The court found that, at least in this particular case, plaintiff’s claims for unpaid wages were not exempt from payment under the FLSA de minimis rule and declined to apply the longstanding federal rule to California wage claims of the type raised by plaintiff. The court, however, did not entirely eliminate the possibility of the de minimis rule applying to state wage claims.
In Troester, the plaintiff routinely had to perform tasks related to closing the store after he had clocked out. These tasks included things like shutting down the computer system and locking the doors. Under the FLSA de minimis rule, infrequent and insignificant periods of work that occur outside work hours and cannot be precisely recorded need not be counted as work time. The court found that the routine, regular nature of the tasks performed by plaintiff was the crux of the issue: because employees are regularly doing these tasks, employees should be compensated for them and Starbucks’ argument that the time was de minimis was not accepted. Indeed, the court said: “The relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off-the-clock without compensation.” (emphasis added).
Because this ruling applies to all hourly workers in California, the implications could be quite broad. Retailers will have to ensure that employees who open and/or close a shop have a consistent way to capture time spent doing the required tasks if those functions would normally not be recorded as hours worked. Employers will then need to go further and evaluate what sort of tasks are regularly expected from their hourly workers when they are off the clock, whether it’s opening/closing activities, bank deliveries, or other functions that may take place outside of work. Employers will need to determine whether these tasks are routine enough to devise a system to capture the time. For example, if an employer expects an hourly employee to routinely respond to emails or texts during off hours, there will need to be a way to capture this time and policies and procedures should be put in place to ensure that happens.
Currently, this ruling is limited to California, whose wage and hour laws do not make mention of a de minimis exception. However, this issue could potentially spread to other states with similarly drafted statutes regarding hours of work. Given the ubiquity of technology, and the increased pressure to stay connected to work via smartphones, VPNs, etc., it would be no surprise to see more and more plaintiffs attempt to use this ruling to work to capture what may have previously been considered de minimis time. Employers should be looking carefully at their policies and procedures for timekeeping and to help protect from any potential legal issues.