By Gerald L. Maatman, Jr., Shireen Y. Wetmore, Nathan K. Norimoto, Nick Baltaxe
Duane Morris Takeaways: In Huerta v. CSI Electrical Contractors, Case No. S275431, 2024 Cal. LEXIS 1446 (Cal. Mar. 25, 2024), the California Supreme Court held that time spent on an employer’s premises to undergo a security check could constitute compensable hours worked; that time spent traveling on an employer’s premises may be compensable as employer-mandated travel time; and that employees covered by the Labor Code’s “construction occupation” exception to meal periods may be entitled to minimum wage for the time spent working during an on-duty meal period. As a result, companies operating in California should review and adjust their pay policies on these issues to ensure complaint pay procedures.
Case Background
Plaintiff George Huerta worked at a solar power facility in Central California that was managed, in part, by Defendant CSI Electrical Contractors (“CSI”). Id. at 3. At the start and end of each shift, employees waited at the facility’s entrance to partake in a security check, which included rolling down a window and showing an ID badge, a visual inspection of the vehicle, and at times, a search of the vehicle. Id. Huerta alleged that CSI owed him compensation for the time spent waiting to pass through the security checkpoints. After passing through the checkpoint, Huerta then drove down the facility’s roads to reach the employee parking lot. Huerta, again, claimed he should have been compensated for the time spent driving from the facility’s entrance to the parking lot. Huerta was also covered by a collective bargaining agreement (“CBA”) that mandated an off-duty, unpaid 30-minute meal period. Id. CSI’s rules required workers to spend meal periods near their designated worksite for the shift, which Huerta alleged entitled him to additional compensation. Id. at 4-5.
Huerta filed a wage-and-hour class action against CSI seeking unpaid wages. He subsequently appealed his case to the Ninth Circuit, which, in turn, certified three questions to the California Supreme Court, including: (1) is time spent waiting to pass through a security checkpoint on an employer’s premises compensable time; (2) does time spent traveling from a security checkpoint to the employee parking lot constitute compensable time; (3) are workers entitled to paid meal periods when they are prohibited from leaving the jobsite during meal periods? Id. at 1, 5.
The California Supreme Court’s Decision
Industrial Welfare Commission (IWC) Wage Order No. 16-2001 (“Wage Order No. 16”) that governs wages, hours, and working conditions in the construction, drilling, logging, and mining industries covered Huerta’s work at the facility. Id. at 1. To answer the three certified questions, the California Supreme Court interpreted Wage Order No. 16 as follows:
First, the Supreme Court held that under Wage Order No. 16, the time an employee spends on an employer’s premise waiting to undergo a mandatory security check could constitute compensable “hours worked” depending on the amount of “control” exercised over the employee. Id. at 11. The Supreme Court noted that CSI required Huerta to participate in the security check; confined him to the premises until he finished the entrance and exit procedure; and made him perform “specific and supervised tasks” of waiting in his vehicle, rolling down his window, and allowing his personal vehicle to be searched by a guard. Id. at 9-10. Thus, CSI exercised a sufficient amount of “control” over Huerta to render the time spent passing through the security checkpoint compensable time worked under the Wage Order. Id. at 9.
Next, the Supreme Court held that under Wage Order No. 16, travel time may be compensable where (1) “the employer required the employee’s presence at an initial location before mandating travel to a subsequent location” and (2) “the employee’s presence was required for an employment-related reason other than accessing the worksite.” Id. at 18. Here, the Supreme Court offered an example of a worker who reported to an initial jobsite, retrieved work supplies, received the work order, and then traveled to a second jobsite. Id. at 16. Based on this example, the time spent travelling between jobsites represents compensable time. Id. Since Huerta and CSI offered contradictory evidence on this point, the Supreme Court declined to express a “view” on whether the facility’s security checkpoint was a “first location” that CSI mandated Huerta’s presence. Id. at 17.
Finally, the Supreme Court held that “an employee must be paid a minimum wage for meal periods when an employer’s prohibition on leaving the premises or a particular area forecloses the employee from engaging in activities he or she could otherwise engage in if permitted to leave,” even if the employee is covered by a CBA-meal period exception under a Wage Order. Id. at 33. The Supreme Court did not express any opinion on whether CSI’s rules for meal periods prohibited Huerta from the leaving the facility during his 30-minute meal periods, but noted that “if Huerta’s ‘unpaid meal period’ is compensable under the wage order as ‘hours worked,’ he is entitled to seek compensation for that time under Labor Code section 1194.” Id. at 35.
Implications For Employers
California continues to redefine what constitutes compensable time worked at the start and end of shifts. This decision is a must read for employers with mandatory security checkpoints, and such employers are advised to review their security protocols as it may constitute compensable hours worked.