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Federal Contractors Updates

Supreme Court of California Rejects Application of Fair Labor Standard Act’s De Minimis Rule

09/01/18

Author: ADP Admin/Thursday, August 30, 2018/Categories: State Compliance Update, California

Overview: The California Supreme Court has broken with federal precedent once again in favor of its state employees, rejecting application of the Fair Labor Standard Act’s de minimis rule in a lawsuit seeking recovery of unpaid wages under California state law.

Effective Date: July 26, 2018

Details:
The Supreme Court of California recently issued a decision rejecting the application of the so-called “de minimis” rule to California wage and hour law. Under the federal Fair Labor Standards Act (FLSA), there has long been a principal known as the “de minimis” defense. In short, this theory holds that amounts of time worked that are so small or trivial as to be inconsequential, and that are also difficult to record, do not need to be considered or counted in determining the total amount of time worked by an employee.

In Troester v. Starbucks Corp. (No. S234969), the plaintiff employee was a shift manager at a Starbucks store. As part of his duties, he regularly had to complete a few small tasks after he had clocked out for the day. These tasks included setting the store alarm, locking the building and occasionally, walking employees to their cars. The employee estimated that these tasks generally took him between 4 and 10 minutes per day. Over a period of 17 months, he claimed that they added up to 12 hours and 50 minutes of unpaid time worked, or a total amount of unpaid wages in the amount of $102.67.

Starbucks argued that, under the de minimis defense, it was not liable for failure to pay for the employee’s unrecorded time spent on activities after he clocked out. The court rejected this argument. It found that the de minimis defense had never been adopted either under the California Labor Code, or the California Wage Orders. Further, it found that where it is clear that employees are regularly working small amounts of time for several minutes a day, that time must be recorded and employees must be paid for them. While the court declined to determine whether there may ever be circumstances under which a California employer may be excused from compensating employees for very small amounts of working time, it rejected application of the de minimis doctrine where, as here, the employer “requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job.”

To read the Troester decision, click here: http://www.courts.ca.gov/opinions/documents/S234969.PDF

Action Required: Employers should review their practices to ensure that employees record all time worked to the greatest extent possible. Employers should also ensure that policies require employees to record all time worked, and training supervisors and managers to be aware of the need to for employees to record all time worked, even if that work is conducted right before or after an employee’s scheduled shift. Employers should contact their legal counsel with any questions about the Troester v. Starbucks Corp. decision.

This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.

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