On December 21, 2011, a California appellate court made two important rulings regarding reporting time and split shift pay: First, non-exempt employees are not entitled to “reporting time pay” for attending scheduled meetings at work, even though no “usual” day’s work is performed, as long as the employee is paid for at least half of the time for which the meeting was scheduled.
Second, non-exempt employees are not owed additional compensation for working “split shifts” when they earn at least minimum wage for all hours worked that workday, plus an additional one hour’s pay at the minimum wage rate.
The case, Aleman v. AirTouch Cellular, is the first published California case on the two issues. It involved former non-exempt employees of AirTouch who alleged, among other things, that the company violated two provisions of IWC Wage Order 4 (which are identical in all material respects to many of the Wage Orders), including failing to pay reporting time pay and failing to pay split shift compensation for days when employees attended a work meeting in the morning and then worked another shift later that same day.
On the first issue, the Court focused on the language of the Wage Order, and in particular, the requirement that reporting time pay be paid only when the employee is required to report for work and “is not put to work or is furnished less than half said employee‘s usual or scheduled day‘s work.” Cal. Code Regs., tit. 8, § 11040m subdv. 5(A) (emphasis added). The Court noted that the requirement to pay reporting time pay is expressly conditioned upon the employee either not being put to work at all, OR being paid less than half his/her usual OR scheduled day’s work. Importantly, because these meetings were actually “scheduled” in advance, and because the employees were paid for their time at the meetings, which was always at least half of the time for which the meetings were scheduled, the condition that triggers payment of reporting time pay did not occur and no reporting time pay was owed.
With respect to the second issue, the Court looked to the language of the section at issue, and also to its placement within the section on “Minimum Wage.” Specifically, subdivision (C) of section “4. Minimum Wage.” reads: “When an employee works a split shift, one (1) hour‘s pay at the minimum wage shall be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment. Cal. Code Regs., tit. 8, § 11040, subd. 4(C) (emphasis added).
The Court held that if the employee receives at least minimum wages for all hours worked, plus an additional hour’s pay at the minimum wage rate, no additional or “split shift pay” was owed. Thus, for example, an employee who works a split shift with total of 8 hours in the workday at $10 per hour for a total of $80 would not be owed any split shift pay because he/she received at least minimum wage for all hours of work ($8 x 8 = 64) plus an additional $8. Had this employee been paid $8.15 per hour for a total of $65.20, he would be owed an additional $6.80 ($8 x 8 hours = $64 + $8 = $72; $72-$65.20 = $6.80) to bring him within the required amount.
Although Aleman may be appealed, for now it provides employers with some valuable guidance: Schedule workplace meetings in advance, including the meeting’s likely duration, and for those employees working split shifts, no additional compensation is owed provided that the employee earns at least minimum wage for all hours worked, plus an addition one hour’s pay at the minimum wage rate.