Are You Compensating Your Employees for All Hours Worked?
California requires employers to pay non-exempt hourly employees a minimum wage for all hours worked. Hours worked include all the time during which an employee is subject to the control of an employer and/or all hours an employee is suffered or permitted to work, whether or not required to do so. At the beginning of this year, the California Supreme Court issued an important ruling which reinforced the importance of ensuring that all non-exempt hourly employees are compensated for all hours worked. In Frlekin v. Apple, Inc. (2020) 8 Cal. 5th 1038, the California Supreme Court held that the time spent on the employer’s premises waiting for, and undergoing, required exit searches was compensable as hours worked.
In the Frlekin case, Apple retail employees filed a class action lawsuit against Apple alleging that Apple failed to pay employees minimum and overtime wages for the time spent waiting for and undergoing required exit searches. Per Apple’s policy, anytime an employee left a retail store for any reason (including a break, lunch, or end of shift) they were required to have a manager or security officer conduct an exit bag search. Apple also required employees to clock out before submitting to an exit search and the employees were not compensated for the time employees spent waiting for or undergoing the exit search.
The Court found that the employees were clearly under Apple’s control while waiting for and undergoing the exit searches for several reasons.
- First, Apple required its employees to comply with the exit search policy under threat of discipline, up to, and including, termination.
- Second, Apple required employees to remain on the premises until a manager or security officer completed the exit search.
- Third, employees were required to locate a manager or security guard to perform the search and actively participate in the search.
In sum, the Court found that Apple exercised sufficient control over its employees for the exit searches to be considered compensable time.
The COVID-19 pandemic has caused drastic changes to the current workplace. As employees begin to return to on-site work, employers are implementing protocols to prevent the spread of COVID-19 in the workplace, including on-site employee health screenings. While employers and employees navigate these changes, it is important for employers to remember that the COVID-19 pandemic has not changed California employer’s obligations to ensure that non-exempt hourly employees are compensated for all hours worked.
The Frlekin decision serves as a reminder that some of these new protocols could actually result in an employer exercising control over employees before they begin their regular workday. Depending on the employer’s policy, this could be considered compensable time. Employers should contact legal counsel with any questions regarding new health screening protocols to ensure they are compensating non-exempt hourly employees for all hours worked.
Robin H. Smith, Associate Attorney
Robin H. Smith represents employers in labor and employment matters including discrimination, wrongful termination, harassment and wage and hour violations. She also represents individuals and business entities in complex catastrophic personal injury matters, including product and premises liability.