On July 26, 2018, in a long-awaited decision, the California Supreme Court rejected the applicability of the Fair Labor Standards Act's “de minimis” doctrine to California wage and hour law.
The issue in Troester v. Starbucks was whether the federal Fair Labor Standards Act's (“FLSA”) de minimis doctrine applies to claims for unpaid wages under certain provisions of the California Labor Code. For decades, the de minimis doctrine has been applied in the federal wage and hour context to excuse payment of wages under the FLSA for insubstantial or insignificant periods of time.
On August 6, 2012, Douglas Troester, a former shift supervisor at a Starbucks location, filed a lawsuit against Starbucks in state court in Los Angeles, California. Mr. Troester filed his lawsuit on behalf of himself and a proposed class of all non-managerial Starbucks employees in California who performed certain tasks associated with closing stores from mid-2009 to October 2010. According to Mr. Troester, after he initiated the software's close store procedure, he activated the alarm, exited the store, locked the front door, and walked his coworkers to their cars in compliance with Starbucks' policy.
A U.S. District Court judge granted summary judgment to Starbucks based on the de minimis doctrine as developed under the FLSA, under which small amounts of work time may be disregarded in determining non-exempt employee compensation. Over Mr. Troester's 17 months of employment with Starbucks, the district court calculated that his unpaid time for store closing tasks totaled less than 13 hours, or just over $100 in unpaid compensation at the applicable minimum wage. To determine whether the doctrine applies in a given case, the federal courts look to “(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.” Under the FLSA test, federal courts have held that up to 10 minutes of work time might qualify as de minimis.
When that decision was appealed to the Ninth Circuit, the federal court deferred to the California Supreme Court, certifying the question of the applicability of the FLSA's de minimisdoctrine to claims for unpaid wages under California law.
California Statutes and the “de minimis” Doctrine
First, the California Supreme Court first ruled that California had not adopted the FLSA's de minimis doctrine. It reasoned that California wage/hour law is more protective than the FLSA and explicitly requires that employees be paid for “all hours worked.”
Working Off the Clock
Second, the court stated that although California has a general de minimis rule that is a “background principle of state law,” the rule is not applicable to the facts presented by Mr. Troester because California law does “not allow employers to require employees to routinely work for minutes off-the-clock without compensation.” The court acknowledged that some extremely limited form of the de minimis doctrine might be applicable to wage/hour claims but held that it was not applicable in this case.
Compensating Employees for Time Spent on Irregular Activities
The court expressly declined to decide whether it would be appropriate to require employers to compensate employees for the time spent on activities that are fleeting or irregular. In a concurring opinion, Justices Kruger and Grimes elaborated on certain instances where the de minimis doctrine arguably should apply, such as when employees have to turn on and log onto their computers at the start of a shift or address a computer glitch, check their schedules off-hours, or have to respond to a quick customer question after they have clocked out. In such cases, they acknowledged the administrative difficulty in capturing this time might justify applying the de minimis doctrine.
Rounding of Work Hours
The court also addressed rounding practices, which both add and reduce time. The court noted that California law allows for employers to minimally round employees' actual time punches, even after this decision, as long as rounding does “not result, over a period of time, in the failure to compensate the employees for all the time they actually worked.”
California Employment Lawyers
California employers must maintain compliance with both federal and California wage and hour laws year-round. This means understanding when those laws are similar and when differences exist. This also means knowing which legal provisions are most favorable to employees. Should you have questions about federal or California's wage and hour laws don't hesitate to contact Kingsley & Kingsley to speak with one of our experienced labor lawyers if you have questions about any of California's existing employment laws.
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