On February 4, 2019, the California Court of Appeal issued its ruling in Ward v. Tilly’s, Inc. The Court held that employers requiring a nonexempt employee to report in by telephone, text message, or computer before a possible on-call shift to find out whether to report to work may be required to provide reporting time pay.
The plaintiff in that action, Skyler Ward, was a sales clerk at a Tilly’s store in Torrance, California. During her employment with Tilly’s, Ms. Ward and other employees were scheduled for “on-call” shifts. Employees were required to contact their stores two hours before the start of their on-call shifts to determine whether they were needed to work those shifts. Tilly’s informed its employees to assume that they would need to work such shifts unless told otherwise. Employees were disciplined by formal reprimands (or possible termination upon three violations) if they failed to contact their stores before on-call shifts, contacted the stores late, or refused to work on-call shifts. However, Tilly’s did not compensate employees for on-call shifts unless the employee was required to work the on-call shift. Further, Tilly’s did not consider an employee to have “reported for work” if the employee contacted the store prior to an on-call shift, but was told not to work.
The plaintiff filed a putative class action complaint against Tilly’s alleging that Tilly’s “on-call” policy violated California’s Industrial Welfare Commission Wage Order 7. Wage Order 7, which governs “all persons employed in the mercantile industry,” requires, among other things, that employers pay employees “reporting time pay” for 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.” Plaintiff argued that employees who were required to contact the store were entitled to reporting time pay since they are “report[ing] for work” under Wage Order 7. Tilly’s argued that “report for work” meant physically appearing at the work site and, if employees who call in are told not to come to work, they are not owed reporting time pay.
The Court of Appeal agreed with the plaintiff and concluded “that the on-call scheduling alleged in this case triggers Wage Order 7’s reporting time pay requirements” since “…on-call shifts burden employees, who cannot take other jobs, go to school, or make social plans during on-call shifts—but who nonetheless receive no compensation from Tilly’s unless they ultimately are called in to work. This is precisely the kind of abuse that reporting time pay was designed to discourage.” More specifically, the Court held that “an employee need not necessarily physically appear at the workplace to ‘report for work.’ Instead, ‘report[ing] for work’ within the meaning of the wage order is best understood as presenting oneself as ordered.”
The Court of Appeal further held that the reporting time pay requirement operates as follow: “If an employer directs employees to present themselves for work by physically appearing at the workplace at the shift’s start, then the reporting time requirement is triggered by the employee’s appearance at the job site. But if the employer directs employees to present themselves for work by logging on to a computer remotely, or by appearing at a client’s job site, or by setting out on a trucking route, then the employee ‘reports for work’ by doing those things. And if, as plaintiff alleges in this case, the employer directs employees to present themselves for work by telephoning the store two hours prior to the start of a shift, then the reporting time requirement is triggered by the telephonic contact.”
Given the above, California employers should closely review their on-call scheduling policies to ensure they are consistent with the California Court of Appeal’s ruling in Ward v. Tilly’s, Inc. While Ward v. Tilly’s, Inc. specifically applied to the mercantile industry and Wage Order 7, it would not be surprising to see other courts in California apply this same decision to other industries and wage orders.
Leech Tishman’s Employment Practice Group can help clients ensure compliance with California’s complex and technical employment laws and can assist clients with defending against civil or administrative actions.
If you have any questions regarding California’s unique employment laws or these employment law updates, please contact Fadi K. Rasheed. Fadi is Counsel with Leech Tishman and a member of the firm’s Employment, Litigation and Corporate Practice Groups. Fadi is based in the Leech Tishman’s El Segundo, CA office. and can be reached at 424.738.4400 or frasheed@leechtishman.com.
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