In California: On-Call Policies May Require Reporting Time Pay

In California, industry-specific Industrial Welfare Commission (IWC) Orders supplement other wage and hour requirements found in the California Labor Code. IWC Orders govern everything from uniforms, to alternate workweek schedules, to reporting time pay. In Ward v. Tilly’s, Inc. (Cal. Ct. App. 2019), a class of retail store employees sued their employer for reporting time pay when the employer maintained a two-hour call-in requirement for its on-call shifts. Under the employer’s policy, employees were required to call in more or less exactly two hours prior to on-call shifts to determine whether they would be working that day. If an employee failed to call in according to the policy, corrective or disciplinary action was taken by the employer.

The employees argued that the IWC Order’s reporting time pay requirement applied to the employer’s policy. In relevant part, the IWC Order states:

“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 (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than minimum wage.”

In other words, because the employer’s policy required employees to “report for work,” and employees were not always put to work after calling in, the IWC Order mandated that the employee be paid for reporting time according to the IWC Order provision.

While successful at the trial court level, the California Court of Appeal ruled against the employer and determined that, on the specific policy maintained by the employer, reporting time pay was due.

The ruling is, of course, open to a further appeal to the California Supreme Court. In addition, the decision appears to apply only to the specific policy in question in the Tilly’s case, though employers with similar policies will wish to consult with legal counsel to determine whether their policies create liability for reporting time pay. Policies with longer call-in requirements (e.g., three or four hours before an on-call shift), or which do not provide for adverse action against employees who do not call in, may not be subject to the reporting time pay liability, but this bears further clarification. Conversely, similar policies with shorter call-in requirements (i.e., less than two hours) are likely subject to the Tilly’s decision and the reporting time pay it requires.

For questions about the Tilly’s decision, or for a review of an on-call reporting requirement in light of the decision, please contact the Employers Council’s California legal services unit via CAINFO@EmployersCouncil.org.