A recent court decision in Ward V Tilly’s Inc. (CA Court of Appeal, 2nd district) on February 4, 2019 puts an interesting spin on the meaning of “reporting time pay” and how “on-call” employees must be compensated. If you have on-call employees, it is important to examine your practices to ensure you will not be on the hook for additional wages when they are not given work.
“Reporting time pay” is required in California when an employee shows up to work for a shift and is sent home before working at least one-half of the scheduled day’s work. When this occurs, the employee is owed one-half of their usual or scheduled shift, but no less than two hours and no more than four hours. Until the Ward v. Tilly’s decision, reporting time pay has been applied to employees who
physically show up
to their shifts.
Typically, “on-call” employees are given a time frame when they are waiting to be called into work and/or required to respond to a call. When they are called into a shift and/or the work is performed, they are paid for the hours worked. In this case, applied to Wage Order 7-2001 (Mercantile Industry), the court ruled that employees must be given “reporting time pay” when required to call in two hours before a shift to learn whether they were needed for work, and then were told that no work was available (and not to come in for the day.) The court’s reasoning was that an employee who was required to call in two hours before a shift could not schedule personal activities and did not fully have use of this personal time. Therefore, the requirement to call in was a form of “reporting time”.
Even though this is the only published appellate decision in California addressing this specific issue, California employers are now bound by the Ward decision. The ruling applies to all Wage Orders, not just Wage Order 7-2001. We recommend that you review and revise your reporting policies and on-call procedures accordingly to avoid liability.