California Employers On the Hook for Tracking Employee Time
On Thursday, July 26, the California Supreme Court held that California employers may no longer ignore or fail to compensate for small amounts of time that non-exempt employees work simply because recording that time is administratively difficult. This is an alarming departure from the de minimis defense employers have for federal wage-and-hour claims and warrants immediate attention by California employers.
In Troester, the Ninth Circuit asked the California Supreme Court whether California’s wage-and-hour statutes or regulations have adopted the de minimis doctrine. The Court answered no, reasoning that employers are in a better position than employees to devise alternatives that permit the tracking of small amounts of regularly occurring work time. Notably, the Court did not decide whether there are situations when compensable time is so minute or irregular that it is unreasonable to expect time to be recorded. But since the Court found perfunctory tasks like activating an alarm, exiting the workplace, and locking the door were sufficiently measurable to maintain a class action under California law, employers will likely be hard-pressed to show facts that equate to less in damages.
In light of this decision, we recommend that California employers strongly consider devising methods to permit the tracking of small amounts of regularly occurring work time. These alternatives may include:
- using mobile timekeeping applications;
- using timecard/badge systems near entrances and exits; and/or
- estimating work time through surveys or fair rounding policies.
Furthermore, employers should review handbook guidance on pre- and post-work, and clocking in and out, to ensure policies advise employees on how to comply with these processes. And, given the likely retroactive applicability of the decision, employers should consider auditing past practices and possibly providing back pay to affected employees in exchange for legal waivers.