This month’s experts are Marjorie S.
Fochtman, partner, and Paul R. Lynd, senior associate, with the San Francisco
office of law firm Nixon Peabody, LLP.
The state Industrial Welfare Commission Wage Orders require
employers to pay workers a minimum number of hours simply for reporting for
work. For a first reporting in a workday, the employer must pay half of the
regularly scheduled hours for a workday, with a minimum of two hours of pay and
a maximum of four hours. A second reporting in the workday requires payment for
a minimum of two hours. In last month’s issue of CWHA, we
discussed why employers should pay careful attention to these “reporting time pay”
requirements. Here, in Part 2 of our article, we explore some common scenarios
requiring reporting time pay as well as how to pay it.
Common Reporting Time Pay Situations
The most obvious situations requiring reporting time pay are: 1)
when an employee reports for work but then is sent home because work is not
available, and 2) when an employee reports to work but is not put to work but
rather is told to return at a later time. Note that requiring the employee to
wait at the workplace rather than report back later would eliminate the reporting
time pay obligation, but the waiting time would have to be compensated as hours
worked.
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If an employer sends an employee home for unsatisfactory work
performance, reporting time pay applies. Similarly, reporting time pay is due
when an employer requires an employee to report for termination.
Employee Meetings
Reporting time pay questions frequently arise concerning employee
meetings outside of regularly scheduled hours. The time spent attending these
kinds of meetings constitutes hours worked that must be paid. Therefore,
requiring an employee to report for these meetings triggers the reporting time
pay requirements.
On days when an employee has a meeting and otherwise works,
reporting time pay would be required if the employer requires reporting for a
meeting followed by a break in time before the employee’s regular work begins.
Likewise, requiring an employee to report again for a meeting after the
employee’s regular work concludes for the day and then a break in time would
require reporting time pay for a second reporting. Employers may avoid
reporting time pay by scheduling meetings during regular work hours or holding
meetings immediately before or immediately after an employee’s regularly
scheduled working time. Alternatively, the employer could put the employee to work
after a meeting to cover the period that otherwise must be paid as reporting
time.
Reporting time pay is due when an employer requires an employee to report for termination
What about meetings on days when an employee is not regularly
scheduled to work? According to the labor commissioner, these meetings trigger
reporting time pay based on the employee’s usual or regularly scheduled day’s
work on regularly scheduled days. For example, an employee who usually works
eight hours but is required to report for a two-hour meeting on a day off would
have to be paid a minimum of four hours for that day.
When Reporting Time Pay Is Not Required
Reporting time pay applies to nonexempt employees; employees
covered by the executive, administrative, and professional exemptions are
excluded. Note, though, that employees covered by the commission pay exemption
in Wage Orders 4 and 7 are covered by reporting time pay rules.
There are also several situations, specified in the Wage Orders,
when reporting time pay does not apply: 1) when operations cannot commence or
continue because of threats to employees or property or when recommended by
civil authorities; 2) when public utilities fail to supply electricity, water,
or gas, or there is a failure in the public utilities or sewer system; or 3) in
the event of “an Act of God or other cause not within the employer’s control.”
The labor commissioner recognizes more exceptions: when an
employee reports for work but is not fit to work, and when an employee does not
report for work on time and is fired or sent home as a disciplinary action. The
reporting time pay requirements also do not apply when an unexpected or unusual
occurrence during off hours makes it impossible to open for business and the
employer makes reasonable efforts to notify employees not to report. Moreover,
reporting time pay is not given when an employee reports for work but then
leaves early for personal reasons or on his or her own volition.
In addition, an employee on paid standby is not subject to
reporting time pay; rather, the agreed-upon wage rate for the standby time
fully compensates the employee. And finally, a regularly contracted relief
shift of less than two hours does not trigger reporting time obligations.
Paying Reporting Time Pay
Reporting time is paid at the employee’s regular hourly pay rate.
When an employee is paid reporting time pay, time spent actually working is
paid as hours worked and counts toward overtime. Time paid as reporting time
pay for hours not actually worked, however, is paid separately, should be
listed separately on wage statements, and does not count as hours worked when
determining overtime pay. For example, if an employee who regularly works eight
hours reports for a two-hour meeting, he or she must be paid for at least four
hours under the reporting time pay rules. The employee would be paid for two
hours as hours worked for time spent at the meeting, with an additional two
hours paid as reporting time pay, for a total of four hours.
Although the California Supreme Court recently spoke of reporting
time pay as “wages,” reporting time pay apparently should not be included in
calculating the “regular rate” for paying overtime. The labor commissioner advises
that reporting time is “in the nature of premiums required by law,” and thus
should not be included in regular rate calculations, just as overtime premiums
are not included.
The issues
surrounding when and how to pay for reporting time are more complex than they
appear. Employers should consult with an attorney when unusual circumstances
arise that may implicate the requirement to pay for reporting time.