In California, the Industrial Welfare Commission (IWC) plays a key role in establishing regulations for employee wages, working hours, and conditions across different industries. This is accomplished by creating wage orders, which are detailed regulations that set minimum standards for working conditions and define what qualifies as compensable "hours worked" for specific industries or job categories.
IWC Wage Order No. 16-2001 specifically targets the construction, drilling, logging, and mining industries. A key case examining the definition of "hours worked" under this wage order is the recent California Supreme Court decision, George Huerta v. CSI Electrical Contractors (2024). In this decision, the Court closely examined what qualifies as compensable "hours worked," focusing on time spent on security checks, travel within the work premises, and meal breaks that employees are required to take on-site.
George Huerta sued CSI Electrical Contractors for unpaid wages for times he claimed qualified as "hours worked" under Wage Order No. 16-2001. Huerta's core issues were the time CSI employees spent awaiting and passing through site security checks, commuting between the security gate and parking areas, and the restrictions placed on employees during meal times, specifically the prohibition against leaving the premises.
Huerta's lawsuit began in the Superior Court of Monterey County but was later transferred to the United States District Court for the Northern District of California, where class certification was granted. Despite this, the district court favored CSI in its rulings on motions for partial summary judgment. Huerta's appeal then led the Ninth Circuit to seek guidance from the California Supreme Court.
The Court then provided a detailed review, resulting in several important takeaways. First, the Court found that time spent in required security checks does qualify for compensation as "hours worked" based on the significant control the employer exerts during these checks for its own benefit. Second, the Court held that travel time between the security gate and parking lots can be compensable as "employer-mandated travel," if the security gate is the first place where employees must be for work-related reasons beyond simply getting to the worksite. However, this travel time does not qualify as "hours worked" if it is merely due to general workplace rules like speed limits or designated travel paths, as such rules don't amount to a level of control by the employer warranting compensation. Lastly, the Court found that meal breaks where employees are not allowed to leave the site are deemed "hours worked," despite any collective bargaining agreements suggesting they are unpaid, given the control the employer maintains over employees during these times.
The Huerta ruling underscores that the extent of employer control is what largely dictates the classification of "hours worked." With this in mind, employers should closely review their security, travel, and meal period policies for compliance with labor laws. Additionally, collective bargaining agreements cannot diminish the right to compensation for "hours worked" as per wage orders and the California Labor Code. As Huerta makes clear, grasping the nuances of wage orders is crucial for ensuring fair pay and adherence to California labor regulations.
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