California Supreme Court rules that required exit searches must be paid

The California Supreme Court has ruled that employers must pay employees covered under California Wage Order 7 for the time they spend on the employer's premises waiting for, and undergoing, required exit searches.

Background:

California's Industrial Welfare Commission Wage Order No. 7-2001 (Wage Order 7) covers the mercantile industry and requires employers to pay their employees a minimum wage for all "hours worked." Hours worked includes "the time during which an employee is subject to the control of an employer."

California Supreme Court Case:

The case before the California Supreme Court involved a policy at Apple Inc. that required the company's retail store employees to undergo searches of their personal packages, bags, and devices before leaving the store. The company directed employees to clock out before they went through the exit searches. Typically, employees would spend 5 to 20 minutes waiting for, and undergoing, these searches.

The question before the California Supreme Court was whether Wage Order 7 requires employers to pay employees for the time they spend waiting for, and undergoing, these exit searches.

In making its decision, the California Supreme Court identified several factors to examine in such cases, including:

• Whether the activity is mandatory
• The location of the activity
• The degree of the employer's control over employees
• Whether the activity primarily benefits the employee or employer
• Whether the activity is enforced through disciplinary measures

"Applying these factors here, it is clear that plaintiffs are subject to Apple's control while awaiting, and during, Apple's exit searches," the court concluded. "Apple's exit searches are required as a practical matter, occur at the workplace, involve a significant degree of control, are imposed primarily for Apple's benefit, and are enforced through threat of discipline."

For this reason, the court ruled that the exit searches must be paid and that its decision applies retroactively.

Compliance Recommendations: