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Employees Are Entitled to Reporting Time Pay if Required to Call In to Confirm Shifts

February 25 2019

 

by Lukas Clary
The Labor and Employment Law Blog

 

Figuring out how many employees to schedule each day can be an inexact science. Unexpected surges or lulls in customers, employee absences due to illness or emergencies, and various other circumstances can impact personnel needs.  Employers sometimes choose to navigate these situations by overscheduling and then cutting loose employees who are not ultimately needed.  That approach, however, triggers “reporting time” obligations, under which those employees are entitled to a minimum amount of pay for reporting for work. But what does it mean to “report for work”?  What if an employer allows employees to call in a few hours before a scheduled shift to determine whether they are needed? Are employees required to physically show up to trigger reporting time obligations, or do these phone calls constitute “reporting for work” for this purpose? The answer is the latter according to a recent California appellate court in Ward v. Tilly’s, Inc.

The Case

Tilly’s employed the plaintiff, Skylar Ward, as a sales clerk in one of its California stores.  Tilly’s often scheduled Ward and other employees on “call-in” shifts. Under these shifts, employees had a designated beginning and end time, but were required to call the store two hours beforehand to determine whether they were in fact needed. If the employees were needed, they would show up and work the shift. If they were not needed at the time of the call, they would not have to show up.

Ward alleged that the call-in shifts violated the “reporting time” requirements found in Industrial Welfare Commission Wage Order Number 7, which regulates the retail industry. She sued on behalf of herself and all other Tilly’s employees who worked call-in shifts.

The case turned on what it means to “report for work” under the Wage Orders.  In this case, Wage Order Number 7 provides that for each workday “an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two hours nor more than four hours.”  Boiled down, that means if an employee “reports for work” and is not needed, or is cut loose less than halfway through their shift, there is a legal minimum amount the employee must be paid.  Similar language can be found in almost all of the Wage Orders, which are broken down by industry and occupation.

Under Ward’s argument, she and other employees had “reported for work” each time they called in to see if they were needed. Therefore, for any shift that they called in and did not have to physically show up, Ward argued that the employees were entitled to reporting time pay.  Tilly’s countered that to “report for work” under the Wage Order requires that the employees physically show up at the job location at the beginning of the shift.

The court agreed with Ward, holding that if an employee is required to phone into work in advance of a shift, that call constitutes reporting for work under Wage Order 7. Specifically, the court held that to “report for work” within the meaning of the Wage Orders is best understood as “presenting oneself as ordered,” whether by physically showing up, calling in, or otherwise.

In reaching its decision, the court noted that call-in shifts provide a huge benefit to employers by allowing them to “create a large pool of contingent workers whom the employer can call on if a store’s traffic warrants it, or can tell not to come in if it does not, without any financial consequences to the employer.”  By contrast, the court held that such shifts “impose tremendous costs on employees,” who cannot commit to other responsibilities—such as working other jobs, scheduling classes, tending to childcare needs, and scheduling social activities—while on call. According to the court, these employer benefits and employee burdens are no different when an employee is required to physically show up or just call into the store in advance. Because the Wage Orders’ reporting pay obligations were intended to incentivize businesses to competently anticipate scheduling needs and not shift the burden of scheduling uncertainty to employees, the court held that the obligations are equally triggered by call-in requirements.

Next Steps for Employers

Employers who already utilize call-in shifts are going to need to immediately assess that practice. Unless the California Supreme Court decides to review or de-publish the Ward v. Tilly’s, Inc. opinion (which remains possible), then call-in scheduling without providing reporting time pay exposes employers to claims for unpaid wages and associated penalties. For medium and large-sized employers, a company-wide call-in policy could result in a class action lawsuit.

To avoid these risks, employers should consider eliminating call-in policies or committing to providing reporting time pay to employees who call in and are not needed. Alternatively, employers may consider ensuring that, even on slower shifts where some on-call employees are not needed, the employees report and work at least half of their scheduled shift before being let go. One other possible option would be for employers to predetermine a select group of employees who are available to work on short notice, and then contact those employees when it appears extra help is going to be needed. While none of these options present an ideal replacement for the convenience of call-in scheduling, the risk of liability associated with that practice mandates employers find the next best option.

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See more writing about labor and employment law on The Labor and Employment Law Blog.