Stay Informed

In California, employees are guaranteed rest periods of 10 minutes per four hours worked. Failure to permit those rest periods can have serious consequences for employers, including payment of penalties and overtime wages. Central to the question of whether an employee is “resting” is whether the employer is “controlling” the employee’s time. In late 2014, the Supreme Court of California reviewed this issue in Augustus v. ABM Security Services, where it evaluated what it meant to rest under Labor Code 226.7 and Industrial Welfare Commission (IWC) Wage Order No. 4-2001. Although tasked with evaluating rest periods only, the Court’s decision has quickly spread, and will likely spread further, to other employment-related issues where the question of control arises.

Is the employee really resting?

In Augustus, ABM required its security employees to keep their radios on and expected employees to respond to situations that arose, from escorting a building tenant to the parking lot to handling a medical emergency. The Court found that an employee is not “resting” where there is an affirmative duty to carry out the tasks of his or her employment. The Court focused its analysis on ABM’s control over their employees’ free time, in direct contradiction to the Labor Code and IWC Wage Order requirements.

What are the work expectations?

In short order, this opinion found its way to the lower courts, forming the basis for the Santa Clara Superior Court’s dismissal of a rest period-related claim in Ken Kennedy v. Odwalla, given Odwalla’s clear 15-minute break policy. The court, however, created some gray areas when it stated that the plaintiff may have shown that making his deliveries on time necessarily required, or that the Odwalla culture otherwise encouraged, that he skip breaks. Now, it appears employees can submit evidence that an employer or its agent encouraged employees, though not necessarily explicitly, to skip breaks to substantiate claims of violations of state labor laws.

Augustus’s effects are being felt even outside the rest period context. A federal jury in San Francisco recently hit Wal-Mart with a $54 million verdict for unpaid wages to Wal-Mart truck drivers for duties performed, in part, during their layover periods. In upholding that verdict, the court cited Augustus, stating that Wal-Mart’s requirement that the truck drivers remain with their tractors overnight unless they received pre-approval amounted to control of the employees’ time, mandating payment of a minimum wage.

What can California employers do?

What can California employers do to protect themselves in this new landscape? Wherever a labor law or wage regulation discusses or touches upon controlling an employee’s time, employers would be wise to think of control in the broadest possible sense. As the law stands, nearly any limitation on an employee, regardless of how small, can potentially affect whether the employer complies with a wide range of California labor laws and regulations.