What are the “Hours Worked” for Purposes of Calculating Employee Pay?
Employers must pay employees for all “hours worked.” But does an employer have to pay an employee when the employee is not actually rendering services on behalf of the employer? The answer may surprise you.
Definition of Hours Worked
The Industrial Welfare Commission, the agency charged with promulgating California regulations regarding the terms and conditions of employment, typically define “hours worked” as ” the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” This includes any time the employee is required to be in a specific location, and any time the employee actually performs work, even if the work is not previously approved.
Wage Order 5 regarding the Public Housekeeping Industry, adds a special definition “in the case of employee required to reside on the employment premises.” For employees required to reside on the premises (such as residential care facilities and apartment managers) “hours worked” is the “time spent carrying out assigned duties.” This special definition only applies to persons employed in the Public Housekeeping Industry, which includes “any industry, business, or establishment which provides meals, housing, or maintenance services whether operated as a primary business or when incidental to other operations in an establishment not covered by an industry order of the Commission.”
Employees working in the health care industry also have a special definition of “hours worked: “the time during which an employee is suffered or permitted to work for the employer, whether or not required to do so, as interpreted in accordance with the provisions of the Fair Labor Standards Act.”
These differing definitions lead to confusion and potentially costly mistakes. Employees and employers need to understand which hours are counted as hours worked so that employees can be properly compensated.
Recent California Supreme court decisions make it clear that, unless the employee is covered by Wage Order 5, employees that are required to remain on the premises are entitled to compensation, even if the employee spends some of that time sleeping. There are a few exceptions, such as ambulance drivers, but for the most part employers are required to compensate employees for all hours worked.
Some employers need employees to be available to answer cell phone calls and/or email messages. Depending on several factors, the time spent waiting for the phone to ring or for the email to come may be compensable or not. Is the employee “waiting to be engaged?” or “engaged to wait?” State and federal law define compensable on-call or stand-by time differently. Although technology has made it easier for employees to work away from the job site, that same technology also creates new liabilities for employers.
Meals and Rest Breaks
All employees are entitled to take regular meal and rest breaks. Failure to provide required rest breaks to non-exempt employees can carry significant penalties. Employers are required to maintain accurate records of the hours worked, including meal breaks taken. Employers that do not maintain accurate records of meal breaks have a difficult time defending meal and rest break violation claims. Courts and the Labor Commissioner continue to struggle with how much control an employer can exercise over an employee during the required breaks, and how far an employer has to go to ensure the employee is afforded the opportunity take all required breaks.
Despite the media attention given to this topic, many employers still fail to adequately relieve employees, and large and small companies routinely face litigation involving meal and rest break claims. Employers are much more likely to violate wage and hour laws than anti-discrimination laws, and employees are much more likely to pursue wage claims.
Understanding the employer and employee rights and obligations is the first step in resolving any potential issues. Robert Nuddleman has advised and litigated unpaid wage claims on behalf of hundreds of clients. Because he represents employees and employers, he understands the motivating factors behind the dispute, and how to avoid issues before they become problems, and how to resolve problems when they occur.