Do I Have to Pay Employees When They are Sleeping?
The California Supreme Court granted review of Mendiola v. CPS Security Solutions, Inc. in the fall of 2013. Until the Supreme Court issues its decision, employers may not be able to rely on the sleep time rules stated below. If you have questions about your work situation, contact an attorney familiar with California’s overtime requirements.
To some, this question may seem simple, but the answer may surprise you. Generally speaking, an employer must compensate an employee for all “hours worked.” In California, most wage orders define “hours worked” as, “the time during which an employee is subject to the control of an employer, and includes all the time that the employee is suffered or permitted to work, whether or not required to do so.” This means that if I require my employee to be at the work site, the employee is under my control and therefore I am likely required to pay the employee. Even if she is sleeping on the job.
How does this general rule play out in jobs where an employee is required to be at the work site 24 hours a day? There are a host of occupations that require a presence 24-hours a day, even if the employee is not actually performing work the whole time. Caregivers (e.g., personal attendants), ambulance drivers, guards, and ship workers are just a few examples. One option would be to split the 24-hour shift among several workers, and pay all workers for all hours they are required to remain on the premises. At minimum wage ($8.00 per hour in California), this means an employer will have to pay at least $192.00 per day, and usually employ three different employees each day, just to meet the minimum wage requirements.
Some employers choose to deduct 8 hours from the employee’s working hours as “sleep time” or as “on-call” time. Federal regulations clearly allow an employer to deduct 8 hours from the employee’s hours worked in certain situations. But California oftentimes does not follow the federal regulations. A recent case, Mendiola v. CPS Security Solutions, Inc., may provide some guidance.
CPS provides on-site security guards at construction sites. The company provides a trailer with full amenities (e.g., bed, bathroom, kitchen, internet, tv, etc.) and the guard is required to live on the premises. Monday through Friday, the guards are on active patrol 8 hours during the day (5:00 a.m. to 7:00 a.m. and 3:00 p.m. to 9:00 p.m.), and must remain on the premises at night. On the weekends, the guards are on active patrol 16 hours during the day (5:00 a.m. to 9:00 p.m.), and must remain on the premises at night. The guards can technically leave the premises at night, but they have to notify the employer ahead of time so the employer can schedule a relief guard, and the guard has to carry a pager and be able to report back to the site within 30 minutes.
The employer and employees had written “On-Call Agreements,” specifying that the guards were free to engage in their own personal pursuits during the evening, so long as they remained on the premises. If the guard responded to an incident during the night, the guard would be paid for the time spent responding to the incident. Otherwise, so long as the guard received at least 5 hours of uninterrupted “sleep time,” the guard would not be paid for the on-call period. Mendiola sued CPS on behalf of himself and other similarly situated guards, alleging the guards should have been paid for all hours spent at the work site because they were subject to the employer’s control.
Unsurprisingly given past court decisions, the court determined that the time spent on site was compensable “on-call” time. The significant restrictions placed upon the employee combined with the fact that the employee’s presence on site was primarily for the benefit of the employer meant the employer was required to pay the employee for all hours spent at the site.
The court went on to say that when the employees worked a 24-hour shift (e.g., weekend shift), the employer could deduct 8 hours for the time the employee spent sleeping. This is surprising because, with the exception of wage order 5 (which has a different definition of “hours worked” for employees that are required to reside on the premises, and for certain other exceptions such as ambulance drivers and attendants), there is no applicable statutory or regulatory exception for sleep time. After concluding that the federal regulations were not appropriate authority upon which to analyze the “on-call” time, the court concluded it could follow federal regulations with regard to “sleep time.” The court relied Monzon v. Schaefer Ambulance Service, Inc. (1990) 22416 and Seymore v. Metson Marine, Inc. (2011) 194 361. Although those cases revolved around different wage orders, both cases concluded that an employer could deduct for sleep time when an employee worked a 24-hour shift, provided the employee actually received the sleep time and the employer and employee agreed that the employee would not be paid for the time spent sleeping. The Mendiolacourt went even further and concluded that the “sleep time” rule is applicable to all wage orders that have similar definitions of “hours worked.”
We agree with the courts in Seymore and Monzon that because the state and federal definitions of hours worked are comparable and have a similar purpose, federal regulations and authorities may properly be consulted to determine whether sleep time may be excluded from 24-hour shifts. Further, we find this determination to be applicable to all wage orders that include essentially the same definition of “hours worked” found in Wage Order No. 9, including Wage Order No. 4.
The court’s decision indicates an employer does not have to pay employees when they are sleeping if:
- The employee is working a 24-hour shift,
- The employee receives at least 5 hours of uninterrupted sleep time,
- The employee is provided a comfortable place to sleep, and
- The employer and employee enter into an agreement covering the sleep time.
Based on the court’s decision, I have a few recommendations. Do not assume that just because an employee has nothing to do means you don’t have to pay the employee. You must pay employees for all hours worked. If you have an employee working a 24-hour shift, you may be able to deduct up to 8 hours for sleep time, but you must have an agreement in place before the employee performs the work. The agreement should be in writing, and preferably reviewed by an attorney familiar with wage and hour laws.
I highly recommend speaking with an attorney to see whether your payroll practices comply with the law.
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