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California Supreme Court Rejects De Minimis Exception and Requires Employers to Compensate Employees for Every Second of “Off-the-Clock” Work

Once again, the California Supreme Court has held that California’s wage and hours laws do not always follow well-established rules applicable to claims under the federal Fair Labor Standards Act (the FLSA).  More specifically, on July 26, 2018, in Troester v. Starbucks Corp., the California Supreme Court rejected Starbucks’ argument that the FLSA’s de minimis exception to compensable working time applied to wage claims brought under California wage and hour laws.  Instead, the court ruled that California employees must be paid for every minute (and possibly every second) of working time.

Many employers have long-relied upon the FLSA’s de minimis exception, which protects them from having to complete the administratively difficult challenge of monitoring off-the-clock work of short durations that can be practically impossible to track.  Typically, such de minimis working time amounts to less than 10 minutes a day.  Classic examples of de minimis work include the mere seconds or minutes to boot up or shut down a workstation or computer system, unlock or lock up a storefront, or perform other minor pre- or post-shift tasks.  However, the recent ruling in Troester undermines continued reliance on this doctrine in California.

The Court’s decision in Troester followed a federal lawsuit filed by a Starbucks shift supervisor who spent, on average, four to 10 additional minutes each workday activating the store alarm, bringing in patio furniture, walking co-workers to cars, and uploading business information to company computers.  The lower court ruled in favor of Starbucks, finding such activities to be de minimis and non-compensable under California wage and hour laws.  On appeal, however, the Ninth Circuit sought guidance on the issue from the California Supreme Court.  The resulting decision from the California Supreme Court rejected application of the FLSA’s de minimis exception and further found no such exception to exist independently under California law.  The California Supreme Court ultimately held that “[a]n employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of a job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.”

As a result of this decision, California employers are well-advised to reassess timekeeping and compensation policies to capture all time worked (regardless how small the amount of time may be).  Measures to avoid potential litigation regarding off-the-clock work may include new timekeeping systems, restructuring job duties to eliminate pre- and post-shift tasks, or paying employees for pre- or post-shift work based on reasonably estimated average working time for these tasks.  Given the substantial amount of wage and hour class litigation in California, it is critical to consult with legal counsel before implementing such measures.

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