By Karen Bonanno
File this under being “penny-wise and pound-foolish” — trying to save a small amount of money on labor costs at the risk of losing much more.
California’s high court delivered a sobering warning this summer to coffee giant Starbucks when justices unanimously ruled that workers must be paid for doing menial tasks, such as closing and locking up stores, after their paid shifts have ended.
The message to all California employers is clear: No matter how miniscule the time regularly worked off the books may be, hourly employees must be paid.
The ruling involved a class-action lawsuit against Starbucks brought in 2012 by a Los Angeles shift supervisor who was required, after clocking out each day, to report sales data to corporate headquarters, set store alarms, lock doors and walk co-workers to their cars.
The employee estimated that he spent four to 10 minutes on those tasks after each shift for a total of 12 hours and 50 minutes during 17 months of employment. He reportedly was shorted $102.67 in pay, which was computed at the then-minimum wage of $8 an hour.
A federal district court rejected the lawsuit on the grounds that the time spent on the disputed tasks was minimal. Because of a 1946 U.S. Supreme Court ruling, which was written into federal law by Congress in 1961, employees are not entitled to pay for working “a few seconds or minutes” beyond their scheduled hours.
The Starbucks supervisor appealed the rejection based on the federal “de minimis doctrine” — a Latin term for “trivial” — to the 9th U.S. Circuit Court of Appeals. The federal justices referred the matter to the state Supreme Court to determine if the federal law conflicted with state law. Unanimously, the state’s high court ruled it did.
Under California law, employees may not be entitled to pay for every minute worked off the clock, but they must be paid for regular daily assignments, even if they are brief.
California Supreme Court Justice Goodwin Liu noted that what Starbucks called trivial “is enough to pay a utility bill, buy a week of groceries or cover a month of bus fares.”
The 1946 U.S. Supreme Court ruling and subsequent federal de minimis doctrine was based on the difficulty employers had decades ago keeping track of small amounts of time worked off the clock. But technology and times have changed.
And it isn’t “clear why, when it is difficult to keep track of time worked, the employee alone should bear the burden of that difficulty,” Liu wrote.
Closer to home, a Kern County jury’s multi-million-dollar award in a lawsuit earlier this year dramatically demonstrates the financial risk of requiring employees to perform regular tasks that cannot be completed during on-the-clock hours.
In February, a jury awarded $16.2 million to a Bakersfield man, who suffered a brain injury after slipping and falling in a local fast-food restaurant six years ago.
Central to the claim of negligence in the lawsuit was the restaurant’s requirement that employees thoroughly clean grills before closing. While the cleaning process allegedly required two to three hours, workers were told to do the job in one hour after the restaurant’s closing.
As a result, workers routinely began cleaning the grills as early as two hours before closing. Such cleaning, while a restaurant is still open, risks grease and liquids being spilled onto floors and surfaces used by patrons.
On the evening of the accident, a cook was cleaning in the kitchen and walked into the dining room with wet boots to wipe down tables. The 62-year-old patron came out of a restaurant restroom, slid through liquid on the floor, fell and struck his head.
While expressing disappointment at the California Supreme Court ruling involving its Los Angeles shift supervisor, Starbucks has changed its practices and now pays employees for regularly required tasks.
In light of the California Supreme Court ruling, employers should evaluate their practices. Organize shifts, workers’ responsibilities and compensation systems to realize efficiencies, while ensuring employees are paid for the hours — and minutes — they work.
Karen Bonanno is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations. She can be contacted through her website www.PASassociates.com and through the P.A.S. Facebook page.