Statue of Lady Justice

A recent class action lawsuit involving Starbucks could have wide implications for California small business owners. The case turns on whether employers need to compensate employees for small bits of time that are difficult to record. Although federal law says “no,” the California Supreme Court has decided that the law is different in California.

Facts of the Case

The lawsuit involves a group of nonmanagerial employees who close Starbucks stores. According to the complaint, employees need to clock out before going to a different office and initiating certain closing procedures, such as transmitting store inventory and daily sales information.

According to the main plaintiff, these and other tasks added about 4-10 minutes of work to each day. Over a 17-month period, this time amounted to almost 13 hours of uncompensated work.

Because the case is in federal court but involved state law, the federal court certified a question to the California Supreme Court, asking whether the federal de minimis rule applied under California’s labor laws.

The New Rule in California

Under federal labor law, small amounts of time that are administratively difficult to capture do not have to be compensated, especially if they are not regularly reoccurring. However, California is free to afford more protection to workers than federal law.

Examining the state’s labor laws and the facts of the lawsuit, the Supreme Court held that the de minimis rule did not apply when an employer required employees “to work minutes off the clock on a regular basis or as a regular feature of the job.” In fact, the Court sharply noted that what a large corporation like Starbucks considered de minimis “is not de minimis at all to many ordinary people who work for hourly wages.”

How This Affects You

Small businesses might require hourly employees to perform certain micro tasks before or after their shift. They should carefully review their policies and consider whether to compensate employees for this work or to revise the shifts so that no work happens before or after punching the clock.

How much time is too much? The California Supreme Court’s decision states that employers should compensate employees who routinely work “minutes” off the clock. One or two minutes every day is probably enough to warrant compensation. Any activity that occurs sporadically—such as once a month for a couple minutes—might not need to be compensated.

The most interesting part of the Court’s decisions was its rejection that the difficulty capturing small amounts of time somehow relieves employers of the need to pay for this work. Instead, the Court has put the burden on employers to find ways, including investing in technology. Small businesses, which are often strapped for cash, might not have the budget for capturing this time accurately. Nevertheless, they are still on the hook for fully compensating their staff.

Contact a California Employment Lawyer Today

California has strict wage and hour laws, and any violation can be costly. If you need help reviewing your policies, you should reach out to an experienced employment lawyer in California today.

At Kalia Law, we are pleased to offer a free consultation, which you can schedule by calling 650-701-7617 or submitting an online form.

 

- Claire Kalia

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