- Written by Rebecca A. Hause-Schultz
Taking the opposite position of the United States Supreme Court evaluating federal law (read more here), the California Supreme Court has decided that time spent on the employer’s premises waiting for and undergoing required exit searches of packages, bags, or personal technology devices brought to work purely for personal convenience by employees is compensable as “hours worked” in California.
In the case of Frlekin v. Apple, Inc., the employer, Apple, had a bag search policy that required search of employees’ bags, packages, purses, backpacks, briefcases, and personal Apple technology devices whenever the employee left the store. Apple said the time spent waiting for and undergoing these searches was not compensable as “hours worked” in California, in part because employees could opt not to take a bag and therefore would not be required to undergo the search; in other words, the decision to bring a bag to work was “voluntary.”
The California Supreme Court said that the California Wage Orders had to be reviewed “liberally” and with an eye towards “protecting and benefiting employees.” The Court said that the search policy “controlled” employees by (1) requiring employees to comply with the policy under the threat of discipline, including termination, (2) confined employees to the premises as they waited for and underwent a search, and (3) required employees to complete tasks while awaiting and during the search like finding a manager and waiting for that person to conduct the search.
The Court also said that the Wage Orders intended to make compensable the time during which employees are controlled—even if such time is not required. Therefore, because the employees undergoing the search are under the “control” of the employer for the purpose of stopping employee theft, the time is compensable.
Why is the law different under the Federal view? The Fair Labor Standards Act generally exempts non-required work activities, for example the Portal-to-Portal Act explicitly classifies activities prior to and after the workday as non-compensable. The California Supreme Court said that the federal law “differs substantially” from California law, and that a State may enact law that provides employees greater protection than the FLSA, which California has done.
The good news is that the Court confirmed its previous decision regarding employer-provided transportation, saying that “unless an employer compels the employee to use a certain kind of transportation or employer-provided transportation, it would be, without more, unreasonable to require the employer to pay for travel time.” (Emphasis in original). In other words, Apple’s Policy was compensable time because the employer-controlled activity primarily serves the employer’s interest. On the other hand, optional services that primarily benefit the employee, like providing voluntary free transportation, is a service to employees and therefore not compensable time.
COUNSEL TO MANAGEMENT:
The takeaway here is that while California has enacted and will continue to enact employment laws more stringent than other States, the Court’s analysis here continues to validate and support voluntary optional employer-provided transportation as a benefit and service to employees. If you have questions about what should be counted as “on the clock” time, contact The Saqui Law Group, a division of Dowling Aaron Incorporated.
- Written by Manuel Ignacio
The Equal Employment Opportunity Commission (EEOC) announced on Monday that the collection of EEO-1 “Component 2” data for years 2017 and 2018 is now complete. The term EEO-1 “Component 2” refers to pay data that some employers are obliged to file as part of their EEO-1 report.
Since 1996, businesses with at least 100 employees and federal contractors with at least 50 employees and a federal contract of $50,000 or more (“covered employers”), have been required to file the EEO-1 Survey form every year by September 30. The form requires covered employers to report the race, ethnicity, and gender of employees in various job categories.
In 2016, the EEOC announced that it would also begin collecting information regarding the compensation and hours worked of employees, known as “Component 2” data, beginning in March of 2018. However, in 2017, employer groups banded together and successfully petitioned to have the Component 2 requirement struck down. Later that year, employee advocacy groups filed a lawsuit to reinstate the Component 2 requirement.
In April 2019, a district court in Washington D.C. ordered the EEOC to collect the Component 2 pay data for years 2017 and 2018. Employers were then required to submit Component 2 data to the EEOC by September 30, 2019. However, the EEOC has kept its online collection portal open past the original September 30, 2019 deadline, until now. For covered employers who are required to submit Component 2 data but have not yet done so, the EEOC’s submission portal will remain open until 2:00 p.m. local Pacific Standard Time on Friday, February 14, 2020.
The 2019 EEO-1 survey is not yet open, and the EEOC is actually working to discontinue collection of Component 2 data going forward. For now, Covered Employers will have to wait until the EEOC makes its announcement later this year.
COUNSEL TO MANAGEMENT:
Employers currently have no obligation to submit “Component 2” data (hours worked and compensation) for 2019 or any other year. However, the normal EEO-1 survey reporting requirements (race, ethnicity and gender) remain the same. If you are unsure whether your company is required to submit an EEO-1 this year, or if you have any other questions related to the EEO-1 submission process, contact the employment law experts at the Saqui Law Group, a division of Dowling Aaron, Incorporated.