As employers in California know quite well, wage and hour law is complex and ever-evolving. One recent area of focus is whether the time employees spend undergoing employer mandated security checks is compensable. On March 25, 2024, the California Supreme Court weighed in on this topic in Huerta v. CSI Electrical Contractors. Additionally, the Court addressed compensability of time spent traveling on company property between a security gate and the work site and compensability of meal periods when employees are prevented from leaving the premises.
Background Facts
In the Huerta case, employees were required to wait in a line each morning outside a security gate, where guards scanned their badges and sometimes looked inside vehicles and truck beds. Next, they had to drive several miles from the security gate to the employee parking lots, a trip that took approximately 10 to 15 minutes. While driving, employees were subjected to rules designed to promote safety and protect the environment at the work site, including speed limits, noise restrictions, and prohibitions on smoking and using ear buds or ear pods. At the end of the day, workers drove back across company property to the security gate, where a long line formed. Security guards had the right to search vehicles and visually inspected vehicles for stolen tools (or endangered species which were present nearby). This exit procedure could take up to a minute or more per vehicle, but employees could spend 5 to 30 minutes waiting in line for before the search.
Employees were governed by two collective bargaining agreements (CBAs) which specified that the standard workday included an unpaid 30-minute meal period. Employees were not permitted to leave the site during their workday.
The Court’s Three Holdings
In Huerta, at the request of the United States Court of Appeals for the Ninth Circuit, the Court answered three questions about compensability of time involving security checks, travel time and unpaid meal periods.
First, the Court held that employees’ time spent on an employer’s premises awaiting and undergoing an exit security procedure that includes the employer’s visual inspection and that is mandated by the employer for its own benefit is compensable as “hours worked.”
“Hours worked” is generally defined as the time during which an employee is subject to the control of any employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so. This often results in an analysis of the level of control that an employer has over an employee and whether that control rises to a sufficient level such that the time constitutes “hours worked” and must therefore be compensated.
Before Huerta, California courts had not addressed whether time spent on the employer’s premises, in a personal vehicle, waiting for and undergoing an exit process which includes a vehicle inspection and attendant delay, is compensable under the control clause. Answering in the affirmative, the Court concluded that the control analysis applies equally whether employees are standing in line and undergoing an exit search procedure before leaving a brick and mortar store or sitting in their own personal vehicle waiting to undergo a search. Where there are sufficient indicia of employer control, the time constitutes “hours worked” and employees must be paid.
Notably, the Court distinguished the process where an employee stops at the gate of a parking garage and swipes a card or shows identification to facilitate entry or exit, indicating that such a process would not constitute hours worked. Thus, the determination of whether wait time must be compensated is likely to be fact-intensive and will require careful consideration of the amount of control exerted by employers.
Next, the Court held that even though the employer imposed workplace rules on employees during their drive between the security gate and employee parking lots, that time was not compensable “hours worked.” The Court has previously held that “compulsory travel time” is compensable when the employer “controls and requires” employees to travel in a certain manner or at a certain time. (The classic example of “compulsory travel time” is when an employer requires employees to ride on employer buses from a designated meeting place to the work site.) However, in Huerta, the Court held that the applicable rules simply did not impose a level of control that rendered the driving time compensable, even though they put limits on employee activities and the employees had to stop at a security gate before driving across company property to the parking lot. Notably, the Court rejected plaintiff’s argument to the contrary, which could have required payment for virtually all time spent on the employers’ premises.
In addition, the Court considered Wage Order 16, which is applicable only to the construction, drilling, logging, and mining industries and has a unique requirement regarding travel time. It specifies “[a]ll employer mandated travel that occurs after the first location where the employee’s presence is required by the employer shall be compensated at the employee’s regular rate of pay or, if applicable, the premium rate . . . .” Interpreting this provision, the Court held that time that an employee spends traveling between the security gate and the employee parking lots is compensable as “employer-mandated travel” only 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. The Court declined to decide whether the employees in the Huerta case satisfied this standard, but explained that it is not enough that an employee is required to stop at a security checkpoint to access the employer’s worksite. Instead, drive time might be compensable if, for example, an employee’s presence at an initial location is required to pick up work supplies, receive work orders or other directives, or perform work before traveling to a second jobsite.
Third, the Court held that when an employee is covered by a valid collective bargaining agreement and provides the employee with an “unpaid meal period,” that time is nonetheless compensable as “hours worked” if the employer prohibits the employee from leaving the employer’s premises or a designated area and the prohibition prevents the employee from engaging in personal activities they would otherwise be able to engage in.
The Court did not opine on whether the unpaid meal periods were compensable on the facts of this case. However, the Court upheld its prior decisions regarding employer control in the context of unpaid meal periods – “ ‘[w]hen an employer directs, commands or restrains an employee from leaving the work place during his or her lunch hour and thus prevents the employee from using the time effectively for his or her own purposes, that employee remains subject to the employer’s control,’ and thus the employee must be compensated for that time.”
What Does This Mean For California Employers?
Although the facts in Huerta are unique, much of the Court’s reasoning is widely applicable. As such, California employers should carefully analyze policies and practices with respect to off-the-clock security screenings, other mandatory processes occurring before or after work, travel time, and on-premises meal periods to determine whether the facts and circumstances are such that employees should be compensated for that time.
If you have questions about how this new case will affect your business, please contact us.
Wilson Turner Kosmo’s Special Alerts are intended to update our valued clients on significant employment law developments as they occur. This should not be considered legal advice.
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© 2024 Wilson Turner Kosmo LLP. All Rights Reserved.
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