The Starbucks Decision

A Minute Here, a Minute There Can Add Up—California Supreme Court Rejects Federal Rule on De Minimus Time Worked by Employees

Last week, the California Supreme Court concluded, for the first time, that even “de minimus” amounts of otherwise compensable time must be paid by California employers.  Under federal law, small amounts of time worked by employees but administratively difficult to record were not required to be paid to the employee.  The California State Department of Labor Standards Enforcement issued an enforcement manual that included this rule.   Rejecting the interpretation of its own wage and hour enforcement arm, the California Supreme Court said that modern technology allowed for more precise tracking of time and that there was no legal basis for interpreting California law to have adopted the federal de minimus rule.

The Plaintiff in the Starbucks case was a supervisor that was required to clock out, press a button on a computer to send the day’s data to Starbucks headquarters, then set the alarm, and lock the door.  At times, he also escorted employees to their cars.  This time ranged between 4-10 minutes a workday, or 12 hours and 50 minutes over 17 months, causing the employee to be underpaid by $102.67 over that period.

Noting that $102.67 was not a de minimus amount of money to an hourly wage earner, the Court rejected the premise that Starbucks couldn’t have figured out a way to track that time and pay it.   As California law requires employees to be paid for their time worked, Starbucks owed the wages to the Plaintiff (presumably along with several thousand dollars of waiting time penalties). Importantly for employers, the Court did not overturn established rules that allow rounding of time as long as on balance the employee is paid for all time worked.

Given the DLSE’s position prior to this decision, it is important now more than ever for employers to review their timekeeping policies and procedures to ensure that employees are paid for all time worked.  After this decision, any work done for the employer “off the clock” must be compensated, no matter how small the increment.  Employers can no more rely on the DLSE’s enforcement procedures or resort to federal law allowing minimal amounts of time to go uncompensated.