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Posts Tagged ‘meal break’

On-Premises Rest Breaks: Should I Stay or Should I Go?

Posted on: July 18th, 2018

By: Allison Hyatt

Under California law, non-exempt employees are entitled to a 30-minute meal break if the employee works more than 5 hours in a workday, and a 10-minute break for every 4 hours worked (or “major fraction” thereof).  In the past, employers commonly required employees to remain on the premises during rest breaks.  However, with the California Supreme Court’s decision in Augustus v. ABM Services, Inc. (2016) 2 Cal. 5th 257, which emphasized the fact that employers must “relinquish any control over how employees spend their break time,” employers should discontinue any such policies still in practice.

Although the issue in Augustus was on-call rest periods and therefore the Court did not directly consider an on-premises rest break policy, the California Labor Commissioner’s office updated its fact sheet on rest breaks to specially address on-premises break policies in light of the Augustus opinion.  Quoting the Supreme Court’s opinion, the Labor Commissioner’s office explained that employers cannot impose such restraints, stating: “‘during rest periods employers must relieve employees of all duties and relinquish control over how employees spend their time.’  As a practical matter, however, if an employee is provided a ten minute rest period, the employee can only travel five minutes from a work post before heading back to return in time.”

Moving forward, it is unclear as to how courts will address pre-Augustus on-premises rest break policies believed to be legal at the time.  The Augustus Court did not clarify any limitations to what appears to be a sweeping ruling described by the Dissent in Augustus as a “marked departure from the approach we have taken in prior cases.”  2 Cal. 5th 257, 277.  In one post-Augustus case, Bell v. Home Depot U.S.A., Inc. 2017 U.S. Dist. LEXIS 55442 (E.D. Cal. April 11, 2017), the Eastern District of California declined to reconsider a summary judgment ruling in favor of Home Depot on the plaintiffs’ claims that Home Depot violated California law by requiring employees to remain on premises during rest breaks.  The Eastern District had ruled, prior to the decision in Augustus, that such a policy did not violate the applicable California wage order and statute.  In response to the plaintiffs’ motion for reconsideration, Home Depot argued that the Augustus decision implies that restricting employees to the premises, without additional duties or constraints, does not violate the rule.  The Eastern District declined to alter its ruling, noting:

“[t]he facts in Augustus and the present matter are distinct, as the present case does not concern ‘on-call’ rest periods. . . The Augustus court did not directly consider an on-premises rest break policy which does not require employees to remain on call such as the one at issue here.  While the Court finds Defendants’ reading of Augustus more persuasive and accurate than Plaintiffs, it does not specifically adopt Defendant’s interpretation that Augustus affirmatively condones on-premises rest breaks.  Rather, the Court finds that the holding in Augustus does not go as far as Plaintiffs contend.”  2017 U.S. LEXIS 55442 at *5.

It will be interesting to see how other courts interpret the implications of the Augustus opinion.  For now, employers are encouraged to follow the California Labor Commissioner’s advice and discontinue any practices that impose any restraints on how employees spend their break periods.  If you have any questions or would like more information, please contact Allison Hyatt at (916) 472-3302 or email at [email protected].

California’s New Independent Contractor Test

Posted on: July 11th, 2018

By: Christine Lee

On April 30, 2018, the California Supreme Court issued a landmark decision in Dynamex Operations West, Inc. v. Superior Court, No. S222732, in which the Court adopted an extremely broad view of workers who will be deemed “employees” as opposed to “independent contractors” for purposes of claims alleging violations of California’s Wage Orders.  This decision will undoubtedly lead to increased litigation challenging classification of workers across the state as employers will now have a much higher burden to defeat such claims.

Under the new “ABC” test set forth in Dynamex, a worker will be presumed to be an employee unless the hiring entity proves all of the following:

(A) The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract and in fact; and

(B) The worker performs work that is outside the usual course of the hiring entity’s business; and

(C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work he or she performed for the principal.

An employer’s failure to establish any one of the three factors will result in a determination that the worker is an employee as a matter of law.  The Court’s ruling specifically applies to claims asserted under the IWC Wage Orders, which impose obligations related to minimum wages, overtime, and required meal and rest breaks. It is presently unclear how the case applies to claims arising under other statutes.

We encourage all companies doing business in California to immediately evaluate classification of outside contractors or vendors.  Under Dynamex, the vast majority of persons performing services for a company will be considered employees if they are performing work within the usual course of the company’s business, even if those individuals act autonomously and are free from control or direction of the hiring entity.

Therefore, we strongly encourage employers to consult with counsel to evaluate and consider reclassifying independent contractors or risk finding themselves on the losing end of an expensive and painful misclassification case.

If you have any questions or would like more information, please contact Christine Lee at [email protected].