By Laurie Nooren, PHR, PHRca, SHRM-CP
California employers and employees are likely familiar with the reporting time pay requirements included in most of our Industrial Wage Orders. Hang on, because this type of pay is changing, and it may impact your business now or in the future. This starts with retailers and could easily ripple to other industries. A little background first….In essence, many Industrial Wage Orders say:
(A) 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.
(B) If an employee is required to report for work a second time in any one workday and is furnished less than two (2) hours of work on the second reporting, said employee shall be paid for two (2) hours at the employee’s regular rate of pay, which shall not be less than the minimum wage.
For many years, California’s Wage Order #7, covering the Mercantile Industry, has required employers to pay “reporting time pay” to their employees in the amount of two to four hours if the employees physically report for work and there is no work available for them. Previously, for those employers in the mercantile (retail) trade, it was all right to have employees call in two hours prior to an on-call shift to see if they needed to report for work. No compensation was due to these employees for this phone call.
But that may have all changed. In the recent court case (February 2019), Ward v. Tilly’s, it was determined, after appeal, that two hours’ reporting time pay was due merely for calling in to see if the employee was scheduled to work. According to the appeal, these types of on-call shifts can take a toll on employees, especially ones working in low wage positions, as they may have to make child care or elder care arrangements at the last minute, may have difficulties in trying to achieve educational goals while working, or may have adverse financial effects, as well as stress on their families. They also cannot arrange other supplemental employment to help aid them financially.
It’s possible this decision may be appealed to the CA Supreme Court, but in the meantime we recommend mercantile employers immediately re-evaluate any policies that may require employees to call in to find out if they will be working a particular day or shift. You want to make sure you are modifying your practices to ensure compliance with California’s reporting pay requirements. This is a slippery slope and we recommend you contact your employment counsel to assess the risks and next steps.
 There are exceptions, such as the City of San Francisco has a fair scheduling ordinance requiring some retailers to set out work schedules at least two weeks in advance. If changes are made to an employee’s schedule with less than seven days’ notice, the employer must pay the employee a premium of 1 to 4 hours of pay at the employee’s regular hourly rate (depending on the amount of notice and the length of the shift). If an employee is required to be “on-call,” but is not called in to work the employer must pay the employee a premium of 2 to 4 hours of pay at the employee’s regular hourly rate (depending on the amount of notice and the length of the shift). Check out the SF ordinance here. There have been several bills proposed over the last few years to make these types of scheduling requirements effective statewide.