Another bite at the ‘Apple:’ discussing compensable time

The Santa Clarita Valley Business Journal
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Brian E. Koegle – Partner, Poole Shaffery & Koegle

Over the last several years, California courts have issued several rulings dealing with “compensable time” — specifically, when an employer is required to pay its employees for “hours worked.” The latest clarification comes from the highest court in the state in a ruling that surprised many with its broad reach and expansion of what is deemed to be “compensable time worked.”

In Frlekin v. Apple Inc., the California Supreme Court departed from the long-standing rule under federal law that an employee’s time spent waiting for bag checks or screenings was NOT compensable under the Fair Labor Standards Act (Integrity Staffing Solutions Inc. v. Busk). In the Integrity decision, the U.S. Supreme Court determined that security screenings weren’t a part of employees’ “principal activities,” and thus that time spent in screenings was NOT compensable.

However, in distinguishing the (2014) Integrity decision, the California high court cited to the hours worked provision of the California Wage Orders, and held that: “The level of the employer’s control over its employees, rather than the mere fact that the employer requires the employees’ activity, is determinative concerning whether an activity is compensable.” According to the California court, compensable “hours worked” include “the time during which an employee is subject to the control of an employer and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”

Of further concern, the Supreme Court rejected Apple’s request for this decision to only apply looking forward. Rather, the court determined that Apple misapplied existing California law (the Wage Orders), and, as a result, Apple could not claim “reasonable reliance” on the existing federal law. Consequently, Apple will be held responsible for the claims of unpaid minimum and overtime wages, will be required to pay penalties for the previous underpayments and will be required to pay the plaintiffs’ attorneys’ fees.

The Supreme Court’s decision in Frlekin stands as a warning that every business in California should be working with competent legal counsel, trained to understand the nuances of California wage and hour laws, before implementing any policies or procedures.

Brian Koegle is a partner in the employment and labor law department of Poole & Shaffery, LLP. He leads the transactional and litigation teams for the labor and employment division of the business law firm. For more information on Poole Shaffery & Koegle, call (855) 997-7522, or visit pooleshaffery.com. ν

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