Court Favorably Resolves Claims for Reporting Time and Split Shift Pay
This week, a California court summarily adjudicated claims for reporting time pay and split shift pay brought by former employees of AirTouch Cellular. The employees claimed that AirTouch owed them reporting time pay for having to show up to scheduled meetings that were less than 2 hours long. The employees also claimed that AirTouch failed to pay them split shift pay on days when they worked split shifts. The trial court threw out the claims and awarded attorneys' fees to AirTouch under Labor Code section 218.5. A California appellate court agreed with the trial court's rulings on the reporting time and split shift claims, but reversed the award of attorneys' fees.
As for the reporting time pay claim, the facts were undisputed that on certain occasions the employees were required to attend scheduled meetings that were less than two hours in length, and that was their entire "work" for the day. The plaintiffs claimed that California's wage orders required AirTouch to pay them for a minimum of two hours as reporting time pay. The court disagreed, holding that reporting time pay is only required where an employee is furnished with less than half the scheduled day's work. Because the employees' scheduled day was two hours or less, as long as the employees were furnished and paid for at least half of that time, no additional reporting time pay was owed.
As for the split shift claim, the facts were similarly undisputed that the employees on occasion worked a split shift. However, the parties disputed whether a split shift premium was owed in the circumstances. California's wage orders state as follows: "When an employee works a split shift, one hour's pay at the minimum wage shall be paid in addition to the minimum wage for that workday..." AirTouch's position was that because the employees' regular wages were well over the minimum wage, they were paid more than the minimum wage for all hours worked plus one additional hour and, as a result, there was no requirement to pay an additional split shift premium. The court agreed, endorsing the following example:
"As an example, on November 26, 2005, Krofta worked a total of eight hours. Because he was making $10.58 per hour at the time, he was paid a total of $84.64 (8 x $10.58). The minimum wage at the time was $6.75, so a minimum wage worker would be paid wages of $54 (8 x $6.75) plus, pursuant to subdivision 4(C), one additional ―hour‘s pay at the minimum wage, for a total of $60.75 ($54 + $6.75). AirTouch contended that since subdivision 4(C) by itself required no greater payment for the workday than $60.75, the pay for an employee who earned more than that amount (like Krofta) would not be affected. We agree that this analysis, which was followed by the trial court, is correct."
The court's analysis of these split shift and reporting time pay issues is favorable for California employers confronting these claims. Notably, the court also issued a favorable ruling on the validity of another employee's release of claims. The employe had signed a general release in favor of AirTouch and AirTouch argued that the release barred the employee's claims for reporting time and split shift pay. The employee argued that Labor Code section 206.5 invalidated the release. The court disagreed, holding that Labor Code section 206.5 only invalidates a release of wage claims where the entitlement to wages is undisputed. Because the employee's reporting time and split shift claims were far from conceded by AirTouch, the claims were in dispute and could be included in the scope of an otherwise valid general release.
While the court issued favorable rulings on the foregoing issues, the court also issued an unfavorable ruling on the issue of an employer's ability to recover attorneys' fees for defeating a wage claim. The trial court had awarded AirTouch its attorneys' fees under Labor Code section 218.5's fee shifting provision. The appellate court reversed, holding that section 218.5 did not apply and that claims for reporting time pay and split shift pay fall under Labor Code section 1194 (which applies to actions to recover minimum wage and overtime compensation). Because Labor Code section 1194 has a one-way fee shifting provision (entitling only a prevailing employee to recover fees and not a prevailing employer), the court held that AirTouch was not entitled to recover its fees.
This author predicts more litigation and court decisions regarding all of these issues addressed by the court in the AirTouch case. We will continue to keep you posted of such developments. In the meantime, the Aleman v. AirTouch case is available here.