California Court of Appeal Significantly Expands Employers’ Obligation to Provide “Reporting Time Pay”

Last month, the California Court of Appeal issued a decision stating that a retail employer’s call-in scheduling policy—in which employees were required to call the employer in advance of a shift to find out if they needed to show up for work—triggered the “reporting time” obligation under Wage Order No. 7-2001. In Ward v. Tilly’s, Inc., the court significantly broadened the scope of California’s reporting time pay requirement. California employers who utilize on-call or standby shifts are affected by this decision.

Under the retailer’s on-call policy, employees were required to call the store two hours before the shift start time to find out whether they needed to work the on-call shift. Employees who failed to call in, called in late, or refused to work their on-call shifts were subject to formal discipline and could be terminated after three occurrences.

The court found that this practice triggered the employer’s obligation to provide “reporting time pay.” Most of the California wage orders contain a provision requiring employers to pay employees reporting time pay for each workday “an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work.” In such instance, the employee must “be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay.”

For decades, the wage orders’ “report for work” language had been interpreted to mean that the employee is required to physically show up to the work site. The court rejected this interpretation to hold that “an employee need not necessarily physically appear at the workplace to ‘report for work.’ Instead, ‘report[ing] for work’ within the meaning of the wage order is best understood as presenting oneself as ordered. ‘Report for work,’ in other words, does not have a single meaning, but instead is defined by the party who directs the manner in which the employee is to present himself or herself for work—that is, by the employer.”

Because the employer required employees to call in two hours before a shift to find out if they needed to work the shift, the court found this triggered the obligation to pay reporting time pay. However, the court emphasized that reporting time pay is not triggered anytime an employee calls in or otherwise checks his or her schedule.

What This Means For Employers

While the court applied Wage Order No. 7 (affecting retail industries), most of the wage orders share the same language regarding reporting time pay.  Thus, California employers should assume the new interpretation set forth in this case applies to their business.

Employers with on-call or standby shifts should evaluate their policies and practices in light of this decision. If you require employees to check in advance to see if they are scheduled for a particular shift – whether by calling in, checking a schedule online, sending a text message, etc. – this could trigger the employer’s obligation to provide reporting time pay if the employee calls in and then is not actually put to work for that shift.