In a unanimous decision, the California Supreme Court issued a decision providing insight into when pre- and post-shift activities qualify as “hours worked” and need to be compensated as such.

“An employee who is subject to the control of an employer does not have to be working during that time to be compensated,” Justice Goodwin Liu wrote in the 7-0 ruling, adding that driving from work to a security gate and being searched before leaving are not part of commuting.

The worksite, solar power facility California Flats Solar Project, is owned by First Solar Electric Inc. and located on privately owned land. A subcontractor hired George Huerta and other workers to assist CSI Electrical Contractors, the company providing procurement, installation, construction and testing services at the site.

Huerta filed a wage-and-hour class action seeking unpaid wages for employees’ time spent waiting to pass through a security gate and for time spent driving between the security gate and employee parking lots. He also alleged that CSI employees were owed meal period premiums because he and other workers were required to remain on the premises during their meal periods, according to a JD Supra blog post by law firm Payne & Fears LLP.

After CSI won summary judgment on Huerta’s claims, Huerta appealed to the US Court of Appeals for the Ninth Circuit. Finding that California law under Wage Order No. 16 — which applies to employees who work in certain “on-site occupations” in the construction, drilling, logging and mining industries — was unsettled, the Ninth Circuit certified three questions to the California Supreme Court. The questions and answers, within the meaning of Wage Order No. 16, were as follows:

Is time spent on an employer’s premises in a personal vehicle and waiting to scan an identification badge, have security guards peer into the vehicle, and then exit a security gate compensable as “hours worked”?

An employee’s time spent on an employer’s premises awaiting and undergoing an employer-mandated exit procedure that includes the employer’s visual inspection of the employee’s personal vehicle is compensable as “hours worked.”

Is time spent on the employer’s premises in a personal vehicle, driving between the security gate and the employee parking lots, while subject to certain rules from the employer, compensable as “hours worked” or as “employer-mandated travel”?

The time that an employee spends traveling between the security gate and the employee parking lots is compensable as “employer-mandated travel” if the security gate was the first location where the employee’s presence was required for an employment-related reason other than the practical necessity of accessing the worksite. 

Separately, this travel time is not compensable as “hours worked” because an employer’s imposition of ordinary workplace rules on employees during their drive to the worksite in a personal vehicle does not create the requisite level of employer control.

Is time spent on the employer’s premises, when workers are prohibited from leaving but not required to engage in employer-mandated activities, compensable as “hours worked”?

When an employee is covered by a collective bargaining agreement that complies with Labor Code section 512, subdivision (e) and Wage Order No. 16, section 10(E), and provides the employee with an “unpaid meal period,” that time is nonetheless compensable under the wage order as “hours worked” if the employer prohibits the employee from leaving the employer’s premises or a designated area during the meal period and if this prohibition prevents the employee from engaging in otherwise feasible personal activities.  An employee may bring an action under Labor Code section 1194 to enforce the wage order and recover unpaid wages for that time.

In its determinations, the court cited a similar case in which it unanimously ruled that Apple Inc. must pay store employees for time spent in security lines, waiting for managers and/or security personnel to check their personnel bags and cell phones for possible theft.

The decision published March 25 is employer-friendly in key ways, according to the Payne & Fears post. However, it advised employers to take stock of certain procedures:

  • Employers who require employees to pass through a mandatory security checkpoint before entering or exiting work should review their procedures to determine whether the factors identified by the Supreme Court indicate a level of control that makes the time spent undergoing these procedures compensable.
  • Employers may also want to evaluate whether any rules that restrict employee travel while on their premises go beyond those “designed to ensure safe, lawful and orderly conduct,” which the high court reaffirmed can be properly maintained without making on-site travel time compensable.
  • Finally, employers should revisit carefully meal period policies that prohibit employees from leaving the work site during those breaks.

The case is Huerta v. CSI Electrical Contractors Inc.