Calculation of Reporting Time Pay Clarified

Second Quarter 2011Newsletters California Update Employment Law

Finally a helpful wage and hour decision for California employers on the issue of reporting time pay.

Section 5 of each of the Industrial Welfare Commission Wage Orders requires the following: 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 the minimum wage.

The interpretation of this provision has been tricky when applied to a non-exempt employee who usually works an eight-hour shift when called into work for a two-hour training session, disciplinary meeting, or departmental meeting on a day the employee does not normally work.

Until recently, the Department of Labor Standards Enforcement (DLSE) instructed employers to pay the employee four hours, not just two. That was because the DLSE interpreted the wage order as requiring pay for “half the usual or scheduled day’s work” to be four hours if the employee’s usual shift was eight hours, and the meeting was not on a normal work day.

Thankfully, a recently published appellate decision, Price v. Starbucks Corporation, interprets this wage order provision in a more logical way. Now California employers need only pay the two-hour minimum when it is clear that the employee expected to work two hours or less. The court held that because the employee didn’t expect to work a full shift, the employer wasn’t required to pay for “half the usual or scheduled day’s work.” Instead, the two-hour minimum applies. Finally, logic prevails.