Rest means rest

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Last week, the California Supreme Court reversed the Court of Appeal in Augustus v. ABM Sec. Srvs., Inc., holding that “on duty” and “on call” rest periods are against California law under Labor Code section 226.7 and ICW Wage Order 4. While this Wage Order is not applicable to dealership employees, they fall under Wage Order 7, which contains the same rest break provision. Therefore, this case highlights how the Supreme Court may rule on rest breaks for dealership employees. The rule is: (1) For a rest break to be proper employees must be relieved of all duties and the employer must relinquish any control over the employee (but, requiring them to remain onsite does not establish control), and (2) requiring employees to be on call (even if you are not usually called) does not relieve them of all duties.

The details

The issue in Augustus was that the Company required its security guards to remain “on call” during rest breaks (i.e., they had to keep their radios and pagers on, and respond if need arose, but the normal greeting/patrolling type duties were suspended). The Court determined that unlike meal breaks, the Wage Order did not allow for on duty rest breaks. So, if an employee had to answer the phone if it happened to ring during their rest break, they were not free from all duties.

As you know, employees must be permitted to take (2) 10-minute rest breaks for every 8 hour workday. Since these rest breaks are already paid, the Court reasoned that forced on-duty (or on-call) rest periods essentially required the employee to perform “free work” (i.e., additional work for which there was no additional pay). Never mind the fact that the employer is already paying them to rest!

What does this mean for employers and dealers?

On duty or on-call rest breaks subject employers to liability under this ruling. Violating this law can result in a) rest break premium pay of 1 hour per day, at the employee’s hourly rate, and b) waiting time penalties for non-payment, if this premium pay was not paid upon separation. Again, while this ruling was under a different wage order than that applicable to dealership employees, since that wage order contains the same language as the applicable wage order, a court may interpret the wage order applicable to dealers in the same manner.

Issues to consider regarding compliance

You may want to consider reviewing and revising your policies and practices with experienced employment counsel to confirm that none of your policies or practices inadvertently run afoul of this rule. Additionally, you should review your processes to make sure that adherence to them does not create the possibility of a violation of this rule.

Note: ABM is considering filing a petition for rehearing with the Supreme Court, which would be due on January 6, 2017. If filed and subsequently granted, the Court may reconsider all, or part, of its decision.