As most of our blog readers are aware, the Fair Labor Standards Act (“FLSA”) requires employers to keep records on wages, hours and other items, as specified in Department of Labor regulations. Most of the information is of the kind generally maintained by employers in ordinary business practice and in compliance with other laws and regulations.
In recording working time under the FLSA, infrequent and insignificant periods of time beyond the scheduled working hours, which cannot as a practical matter be precisely recorded for payroll purposes, typically need not be compensated. Until now, the courts have held that such periods of time are “de minimis” and thus need not be compensated. The FLSA’s de minimis rule applies only where there are uncertain and indefinite periods of time involved, a few seconds or minutes in duration, and where the failure to count such time is justified by industrial realities.
On July 25, 2018, however, in the case of Troester v. Starbucks Corp., the California Supreme Court declined to apply the FLSA’s de minimis rule and held that California employers must compensate workers for all reasonably measurable time worked, even for small durations of time. In Troester, a former Starbucks shift supervisor allegedly was required to clock out before starting the “close store procedure” on the store’s computer, which required about four to ten minutes of his time on a daily basis. Based on these facts in which the employer required the employee to work “off the clock” for at least several minutes per shift, the Court held that the relevant California statutes and wage order have not incorporated the de minimis doctrine found in the FLSA. The Court further concluded that although California has a de minimis rule that is a background principle of state law, that rule was not applicable here, as the relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off-the-clock without compensation.
The Court was careful to note that its ruling did not necessarily apply to all future cases seeking to invoke the de minimis exception, stating: “We leave open whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.” As a result, this ruling likely does not require employers to track seconds worked that would be impractical and/or unreasonable.
Nonetheless, this ruling requires that California employers take sufficient measures to ensure their employees are compensated for all time worked, with little or no exceptions. While this ruling only applies to California employers, California is unquestionably a leading advocate for employee rights. As a result, it certainly is possible that this decision could start a trend away from the default reliance on the FLSA’s de minimis rule, and that other states will soon follow California’s lead on this issue. Thus, this is a development worth watching going forward.
In the meantime, Troester emphasizes the need for employers in all states to have clearly articulated and enforced policies regarding the recording of work time, particularly when employees work remotely and/or use their smartphones to conduct business. As an employer, you also should provide annual training to all employees regarding your company’s timekeeping policies. In addition, you should train your supervisors regarding their responsibility to enforce these policies, including potential disciplinary action for an employee’s failure to comply with these policies.