In a long-awaited decision, the California Supreme Court rejected the federal de minimis doctrine, making clear that in any instance in which employees perform “minutes of work,” before or after their shifts, that time must be compensated. Under the de minimis doctrine, “insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded.” Federal courts “have found daily periods of approximately 10 minutes de minimis.”
The Court addressed a certified question from the Ninth Circuit, which was grappling with an appeal from a district court that granted summary judgment to Starbucks after applying the federal de minimis doctrine. The undisputed evidence was that, after he had clocked out, a shift supervisor at Starbucks performed certain closing tasks for between four and ten minutes per day, as follows:
The Supreme Court held that under California law, the above-described activities were compensable and Starbucks could be liable for them. The Court found no room for the application of the federal de minimis doctrine in California law, where the Labor Code and Industrial Welfare Commission Wage Orders simply require payment for “all hours worked” or “all work performed.” Plainly, California law is more protective than a “federal rule permitting employers under some circumstances to require employees to work as much as 10 minutes a day without compensation.” Further, “[n]othing in the language of the wage orders or Labor Code shows an intent to incorporate the federal de minimis rule . . .”
Notably, the Court was not swayed by arguments relating to the administrative difficulties of tracking small amounts of time worked before and after regularly scheduled hours, rejecting the notion that “when it is difficult to keep track of time worked, the employee alone should bear the burden of that difficulty.” The Court explained that:
The Court pointed to smartphones, tablets, or other devices, which may be far superior in capturing time worked than a stationary “punch” clock – the standard timekeeping device when the de minimis rule was created. It also posited that the addition of a reasonable estimate of work time for before or end of shift activities “through surveys, time studies, or . . . a fair rounding policy” is a tenable solution. That is, the Court appeared to bless a system where one to two minutes of compensation would be added to the beginning or end of a shift, regardless of any confirmation that the time was actually worked.
The Court did, however, limit its ruling to the facts before it relating to Troester. The Court was faced with several examples of incredibly brief work-related activity, lasting seconds, rather than minutes, such as “ an employee reading an e-mail notification of a shift change during off-work hours.” Instead of creating a rule which would address every second of work-related activity, the Court left “open whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.”
While the Court was purposefully not explicit regarding exactly when such time becomes compensable, the opinion is clear enough that time amounting to “minutes” of work must be compensated. Accordingly, the Troester decision sends a clear signal to employers to closely review their operations relating to employee activity before clocking in or after clocking out. Where there is opportunity to capture additional minutes of time spent working, employers are expected to do it. This may involve restructuring closing procedures to allow employees to clock out after final tasks, such as setting a security alarm, are completed, or even adding one minute automatically to the end of closing shifts.
Contact us if you are interested in a review of your timekeeping policies and procedures in light of the Troester ruling.