Employers Must Pay For Small Amounts Of Time Employees Spend On Work After Clocking Out

A new potential trap for employers was set forth in a recent decision by the California Supreme Court in Troester v. Starbucks Corp. The Supreme Court ruled that employers must compensate its employees for minutes of work that are regularly reoccurring activities, even if it is brief in duration.

This decision rejected the long-standing federal rule that insubstantial or insignificant periods of time that could not be practically and precisely recorded were not required to be compensated. California law, the Court held, does require that time to be compensated.

In Troester, the employee was a shift supervisor at Starbucks who was required to clock out at the end of each closing shift before finishing his required tasks. After the employee clocked out, he was required to go to a separate computer to run a program that would transmit financial and inventory data, activate the alarm, exit the store and lock the front door. He also would walk coworkers to their cars in compliance with Starbuck's policy. He estimated that these tasks would require him to work an extra 4 to 10 minutes per shift.

Over his 17-month employment, he calculated that his unpaid time totaled approximately 12 hours and 50 minutes, which would have been about $102.67, exclusive of any penalties.

The federal court hearing the case originally agreed with Starbucks that this time was de minimis and impractical to account for this time. Therefore, Starbucks was not responsible for compensating him for that time. On appeal, the Ninth Circuit asked the California Supreme Court to answer the question whether California law required Starbucks to compensate the employee for this time. The California Supreme Court said the law required that he be compensated.

However, the California Supreme Court did limit its decision to situations like this one where the employee was required to perform "regularly reoccurring" activities that are required after an employee clocks out. The Court said that it was not necessarily extending its reasoning beyond these scenarios, and that this rule may not apply to activities that are irregular or rarely occurring.

The Court also pointed out that with advancements in time tracking technology, the burden is on the employer to find ways to make sure employees' time is properly captured, such as using new time tracking tools, or restructuring its work so that employees could clock out after finishing closing tasks.

This decision, which was announced in July 2018, will certainly lead to many more lawsuits brought by employees who have a few minutes on each shift for which they have not been compensated. As of this writing, at least one class action has been filed that specifically references this case, and surely more will be on the way.

Employers should take this opportunity to evaluate its time-tracking methods and policies to insure that employee time is captured as precisely as possible so its employees can be compensated for the time spent performing duties on behalf of the employer.

Please contact Andrew Cummings at [email protected] or (949) 975-7500 if you have any questions about any issue discussed in this article, or any other related matter.

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