Is Off-the-Clock Work Compensable or Not?

The recent California Supreme Court ruling on the “Troester v. Starbucks” case has been stirring up discussion and debate and has left employers wondering how this could impact their organizations. On July 26, the California Supreme Court ruled that Starbucks employees must be compensated for off-the-clock activities such as setting the alarm, closing the store at the end of the day, helping a last minute customer, or starting a computer in the morning. These extra duties are all related to an employee’s job and require extra minutes for the employee to complete the task. Even though this time is minimal, about 4 to 10 minutes per shift, the minutes add up to nearly an hour of time each a week that is not compensated. California wage-and-hour law states that any hour an employee spends performing work on behalf of the organization or work that the organization knows of, regardless where it is being performed, is considered working hours and therefore should be compensated.

Employees must report their time to be paid according to the following requirements:

  1. Each workday an employee is required to report to work
  2. If an employee is required to report to work a second time in any one workday

Exceptions employees do not have to report their time to be paid apply to the following situations:

  1. When operations cannot begin or continue due to threats to employees or property
  2. When civil authorities order work to not begin or continue
  3. When public utilities fail to supply electricity, water, or gas
  4. When the interruption of work is caused by a natural disaster or other causes not within the employer’s control

The California Supreme Court looked at another aspect in making their final decision. Under Federal law “de minimis” doctrine, businesses do not have to compensate employees if the time they are working is administratively difficult to track. Under California Law, on the other hand, workers must be paid for all hours worked. Therefore, in accordance with California law, businesses in violation of not compensating their employees for time worked may face significant penalties and legal fees.

As an employer, putting policies and procedures in place to avoid penalties or lawsuits is a good precautionary measure. Allowing your employees to wrap up their work ten minutes earlier than their actual shift end time or clocking in early to wait for their computer to start are some good practices to put in place. As there is not perfect solution for an employer to safeguard themselves from a lawsuit, human resources professionals should be consulted to craft solutions tailored to meet the needs of each organization.


About the Author:

Megan Doan, Office Coordinator at PAYDAY, recently received her Human Resources Certificate from Cal State Fullerton. She enjoys reading and keeping updated on the latest Human Resources news. She loves outdoor activities and going to Disneyland.