For hourly workers, every minute on - and off - the clock counts.
Ask Douglas Troester, the Starbucks employee who sued the Seattle-based coffee retailer for failing to pay him for minutes he worked after clocking out, transmitting daily sales reports and locking the front door. The California Supreme Court, who heard Douglas Troester v. Starbucks Corp in July 2018, agrees. Now, likely, every minute of work in California is considered compensable time, whether de minimus or not.
Traditionally, “de minimus” time, or momentary work-related tasks performed off the clock, was arguably not compensable. This ruling changed that for the State of California.
Employers across the nation are now watching and taking note, reviewing how they look at de minimus time. If a manager calls an employee after hours to send a quick email, a waiter stays late to finish side work or a floor supervisor sets up tables and chairs before clocking in, is this time compensable?
Like most employment practices rules, state case law determines what’s compensable. Now that the State of California has taken a stand, will your state be next? Consider the following best practices for employers in California and beyond:
- Document wage and hour policies and procedures. Include adequate details and information about your company’s wage and hour-related policies and practices, including meal and rest break policies. Explicitly address de minimus time and which tasks you consider compensable to avoid policy gaps.
- Enforce wage and hour policies. Make sure managers and supervisors understand company wage and hour policies and procedures and are implementing them on the ground. They should have a very thorough understanding of how the rules work and be able to explain it to workers to avoid misunderstanding and potential violations.
- Consider installing new time-recording technologies. The traditional time clock is often in the store room or business office and may or may not be easily accessible to workers who have to perform tasks “on their way out.” Instead, some companies are using electronic apps that help them avoid the issue of de minimus time all together. Employees download an app to their phone that allows them to clock in and out in real time after they finish their duties, regardless of their location.
- Engage outside employment council. Always consult with outside counsel specializing in employment law in your state. Even a quick consultation to discuss the company’s policies and practices could avoid a future claim.
Get insured whenever possible
Standard Employment Practices Liability (EPL) insurance policies do not cover wage and hour claims. However, it is possible to buy a wage and hour endorsement. These endorsements, though, only cover employer defense costs and typically have low limits, often capped at $150,000. Generally, a wage and hour endorsement won’t indemnify or cover settlements or regulatory fees. There may also be monoline policies available in your state that could cover both defense and indemnification for wage and hour claims.
Contact your HUB Risk Services specialist to find out the best way to prepare for potential wage and hour claims and how to transfer risk when possible.