New rules for when California employers must pay their employees for “on call” or standby time.

California Law on Paying Employees for On Call Standby Time

Currently, California law defines "hours worked" as "the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so." See, California Industrial Wage Order No. 4-2001.

California's Department Of Industrial Relations Division Of Labor Standards Enforcement (DLSE) has held that on call, or standby, time at the employer's work site is considered "hours worked" for which the employee must be paid even if the employee does nothing but wait for something to happen. However, a different rule applies to on call (standby) time when an employee is off the premises of the employer. In these instances, whether an employee's on-call time constitutes "hours worked" depends on the degree to which the employee is free to engage in personal activities during the on call standby time and the agreement between the parties. See, Berry v. County of Sonoma, 30 F.3d 1174 (1994) and Ramirez v. Yosemite Water Co., 20 Cal.4th 785 (1999).

The California Labor Commissioner and the courts have set forth the following 7 part test to determine whether on-call time constitutes “hours worked”:

1. Whether there was an on-premises living requirement;
2. Whether there were excessive geographical restrictions on employees’ movements;
3. Whether the frequency of calls was unduly restrictive;
4. Whether a fixed time limit for response was unduly restrictive;
5. Whether the on-call employee could easily trade on call responsibilities;
6. Whether use of a pager could ease restrictions; and
7. Whether the employee had actually engaged in personal activities during on call-in time

See, DLSE Opinion Letter 1998.12.28; Gomez v. Lincare, Inc., 173 Cal.App.4th 508, 523 (2009), quoting Owens v. Local No. 169, 971 F.2d 347, 351 (9th Cir. 1992). The more restricted the employee, the more likely the employee is entitled to be paid for his/her on call standby time.

California law further provides that when an employee is required to work a 24 hour shift and is provided with proper sleeping quarters, the employer and employee may agree to exclude up to 8 hours for designated "sleep time" so long as the employee actually gets a minimum of 6 hours of uninterrupted sleep.

California law further provides that when an employee is required to work a 24 hour shift and is provided with proper sleeping quarters, the employer and employee may agree to exclude up to 8 hours for designated "sleep time" so long as the employee actually gets a minimum of 6 hours of uninterrupted sleep. See Seymore v. Metson Marine, Inc., 194 Cal.App.4th 361 (2011).

Mendiola v. CPS Security Solutions, Inc. (July 2013)

In Meddiola v. CPS Security Solutions, Inc. (.pdf), 217 Cal. App. 4th 851 (2013), the Second District Court of Appeals examined whether or not the employer was required to pay for the on call standby time of its California security guards (“Trailer guards” who remained on a work site in residential trailers sometimes for 16 hours a day, and on weekends for a full 24 hours per day) at construction sites to prevent vandalism and theft and investigate alarms. The employer's employment agreement with the security guards set forth the following:

1. On weekends, the security guards worked 24-hour shifts; 16 hours (5am to 9pm) of active patrol, and 8 hours of on-call time (9pm to 5am);
2. The security guards could leave the work site if s/he notified a dispatcher, another guard was available, s/he stayed within a 30-minute radius of the work site, carried a cell phone and responded to any calls from CPS (the employer); and
3. The security guards could engage in personal activities while "on-call" in their trailers, but no children, pets, or alcohol were permitted, and guests were only permitted if pre-authorized by the actual client.

The California employer (CPS) paid its security guards for all active work, but did not pay for the 8 hours of on call sleep time. However, CPS did pay its security guards for any time spent responding to alarms and conducting investigations during the on-call time period, and where that time exceeded 3 hours in any given evening, CPS paid its employees for the entire 8 hour on call time period.

The plaintiff, Mendiola, on behalf of himself and all the other security guards sued CPS for alleged unpaid wages and overtime, claiming that the employer’s on-call policy violated the California Labor Code and Industrial Welfare Commission Wage Order No. 4-2001. The trial court ruled in favor of the security guards ordering CPS to pay the on-call time. CPS appealed. In July of 2013, the California Court of Appeals essentially ruled that the security guards who were required to remain at a work site must be compensated for their "on call" standby time except that 8 hours may be excluded for "on call sleep time" if: (1) the employee is working a 24 hour shift; and (2) the 8 hours of on call sleep time is agreed to under an employment agreement; and (3) the employer actually provides proper sleeping facilities; and (4) the employee is paid for any interruptions.

On October 16, 2013, the California Supreme Court granted a petition for review. The issue to be decided by the California Supreme Court is whether security guards at a construction site are entitled to compensation for all nighttime "on call" hours, or may California employers deduct 8 hours of sleep time when an employee works a 24 hour shift pursuant to a written employment agreement. Until the California Supreme Court renders its decision, Meddiola v. CPS Security Solutions, Inc. is NOT good law and cannot be cited.

What You Should do Now.

If you are a employee working in California, you should always keep track of your hours– regular hours worked, overtime hours, on call hours, hours and/or days taken off from work, for meals, etc…. And yes you should do so even if you THINK you are a salaried exempt from overtime employee.

If you are a California employer, you should have an experienced California employment law attorney review your agreements, written policies, and actual procedures at least once a year to ensure you are in compliance with California's wage and hour rules which constantly seem to constantly change.