California Supreme Court Decision Affects Rest Breaks

Jan 12, 2017
California Supreme Court Decision Affects Rest Breaks

In a disappointing decision for California businesses, the California Supreme Court ruled in late December that on-call rest periods are not permissible. The decision will require many California employers to re-examine their rest-break policies and practices (Augustus, et al. v. ABM Security Services, Inc., 2016 WL 7407328 (2016)).

Rest Break Rules

California’s Labor Code requires that employers provide employees with a paid 10-minute rest period for every four hours of work or major fraction thereof. Anything more than two hours is considered a “major fraction thereof.”

If an employee works fewer than 3.5 hours in one day, no rest break is necessary. If the employee works between 3.5 and 6.0 hours, he/she is entitled to one rest break. After six hours of work, the employee is entitled to two rest breaks.

Employers who do not permit employees to take a rest break owe each employee one hour of wages as a penalty for every day the rest period was missed.

Although the statute and the Division of Labor Standards Enforcement (DLSE) established rules for the number and timing of rest breaks, employers, until now, have not had a clear definition of what constitutes “rest.”

Although we know that employees must be relieved of all duty during their meal periods, we haven’t known until now whether courts would apply a similar standard for rest periods, in part, because rest breaks are paid time (unlike meal breaks).

Background

ABM Security Services, Inc. (ABM) employs security guards across California. Jennifer Augustus and others sued ABM, claiming that ABM failed to provide guards with uninterrupted, 10-minute rest periods as required by California law because ABM allegedly required its security guards to keep their radios and pagers on during rest breaks and respond to emergencies.

The guards presented no evidence that anyone’s rest break was ever actually interrupted; only that they were required to remain on call.

A trial court ruled in favor of the guards, concluding that an employer must relieve its employees of all duties during rest breaks, including the obligation to remain on call. The guards sought a one-hour penalty every day for every one of nearly 15,000 security guards, plus waiting time penalties and interest. The trial court eventually awarded the guards approximately $90 million in damages, interests and penalties.

The 2nd District Court of Appeal reversed the trial court, ruling that on-call rest periods are lawful. The appellate court found that, unlike meal breaks, there is no requirement that employees be “relieved of all duty” while on a rest break. Moreover, the appellate court found that being available to work during a rest break is not the same as working. A petition to the California Supreme Court followed.

Supreme Court Ruling: Relieve Employees of Duties during Rest Break

The California Supreme Court reversed the 2nd District Court of Appeal, concluding that state law prohibits on-duty and on-call rest periods. Disagreeing with the appellate court, the Supreme Court found that rest breaks are similar to meal breaks and must be off-duty.

During required rest periods, employers must:

  • Provide an uninterrupted break;
  • “Relieve their employees of all duties;” and
  • “Relinquish any control over how employees spend their break time.”
  • Take a brief walk of five minutes out and five minutes back; or
  • Complete a phone call to arrange for child care.
  • Meet your obligation to provide uninterrupted rest breaks where the employee is relieved of all duties.
  • Don’t allow employees to be on call during rest breaks — no pagers, radios or required monitoring of cell phones.
  • Relinquish all control over how the employee’s time is spent. In most cases, employees can use their personal phone, take a short walk, go get something out of the car, etc.
  • Consider scheduling rest periods.
  • Educate managers about their obligations relating to rest breaks and that rest areas are off limits for work discussions/interruptions.
  • If you are going to discipline employees who do not return from breaks within the required time, do so consistently. Remember, this is a disciplinary issue, not a pay issue. You still need to pay them appropriately.
  • Since the rest break time is paid, the employee does not need to clock out. However employers may want to consider having their timekeeping records reflect that the rest period was provided to the employee.
  • Inform employees that they should notify human resources or an office administrator/payroll officer if they have been denied the opportunity to take a rest break.
  • If a rest break is interrupted, either pay nonexempt employees one hour at their regular rate of pay if they miss a rest break during the workday or restart the rest period that was interrupted. However, be aware that if the timing of the rest breaks is routinely off you may run into trouble. For more information, see Premium Pay for Meal and/or Rest Break Violations.
  • Review your Wage Order(s).
  • Update your rest break policies. CalChamber's Employee Handbook Creator can help.
  • If you think you qualify for an exemption from the rest break rules, consult legal counsel regarding applying for an exemption.

An employer can’t require employees to remain on call even if they don’t actually perform any work. According to the court, “[t]he rest period, in short, must be a period of rest.”

Although rest breaks are compensable time (unlike meal breaks), the employer must still relinquish control over the employee during the rest break, said the court. An employer cannot meet its rest-period obligations by requiring employees to remain on call. A “broad and intrusive degree of control” exists when there is an on-call rest period because the employee is forced to remain “on call, vigilant, and at the ready.”

The court noted that its ruling does not prevent employers from being able to reasonably reschedule a rest period when the need arises — although such circumstances should be “the exception rather than the rule.”

Employers should be aware that if the timing of the rest breaks is routinely off, you may run into trouble. As a general rule, the rest period should be in the middle of the four-hour work period. In addition, rest breaks should not be combined. For more information, see "Timing of Rest Breaks" in Rest Breaks.

Moreover, if a rest period is interrupted, the court noted that an employer can restart the rest period that was interrupted or pay the premium pay for the missed rest break. But, again, this shouldn’t be a regular practice and regular interruptions are not allowed.

An employer can apply to the DLSE for an exemption if it is impossible to provide completely duty-free breaks without undue hardship and the exemption would not affect the welfare or comfort of employees (under Wage Order 4, Section 17). It is within the DLSE’s discretion to grant the exemption. However, it can be assumed that exemptions will not easily be granted.

Note: This case involved Wage Order 4, which applies to many office workers and others not covered under specific industry orders. Most of the other Wage Orders, but not all, contain the same language. You need to review the specific Wage Order(s) that apply to your business, and if you have any questions, consult legal counsel. For example, Wage Order 5 (e.g., 24-hour care facilities) allows on-call rest periods.

Relinquishing Control

The court clearly states that the employer must relinquish control of the employee. As examples, the court notes that the employee should be free to:

In other words, the employee must be able to use the 10-minute break time as he/she wants.

What about requiring an employee to remain on the premises during the rest break?

Unfortunately, the court never said that employees can be required to remain on the premises during a rest break. The fact that the court noted that an employee should be allowed to take a walk indicates that a requirement to stay on-site would be indicative of employer control, which is not allowed.

The court also noted that Wage Order 4 does not mention that the employer can require the employee to remain on the premises, but Wage Order 5 explicitly does. The implication is that the Labor Commissioner knew how to authorize an on-call rest period where the employee must stay on-site but did not do so here.

Still, the court did state that an employee can be disciplined for not returning from a break in a timely manner. So if the employee goes for a walk and doesn’t come back in time, discipline is still an option.

The reality, however, is that this may be difficult for employers to enforce.

Enforcement Issues

The Wage Orders require a duration of “net” 10 minutes for rest breaks. The DLSE interprets this as the rest period begins when the employee reaches an area away from the workstation that is appropriate for rest. In other words, if the rest area is at a distance from the workstation, the time required for the rest break can be more than 10 minutes.

The DLSE also states that “employers are required to provide suitable resting facilities that shall be available for employees during working hours in an area separate from the toilet rooms.” See section 13 of most Wage Orders for more information.

For example, if your break room is outside Becky’s work station, you can start the 10 minutes when she leaves her work area. If Becky instead chooses to go outside and doesn’t make it back in 10 minutes, you may discipline her.

Alternatively, let’s say you don’t provide any type of rest area that is in the immediate vicinity. Becky has to go to another floor to get to a place of rest, which takes her an additional five minutes. In this situation, you won’t be able to discipline Becky for taking the 15-minute break.

If you have concerns about this issue, you should contact legal counsel.

Best Practices

In light of this decision, employers will want to consider the following best practices:

  • Meet your obligation to provide uninterrupted rest breaks where the employee is relieved of all duties.
  • Don’t allow employees to be on call during rest breaks — no pagers, radios or required monitoring of cell phones.
  • Relinquish all control over how the employee’s time is spent. In most cases, employees can use their personal phone, take a short walk, go get something out of the car, etc.
  • Consider scheduling rest periods.
  • Educate managers about their obligations relating to rest breaks and that rest areas are off limits for work discussions/interruptions.
  • If you are going to discipline employees who do not return from breaks within the required time, do so consistently. Remember, this is a disciplinary issue, not a pay issue. You still need to pay them appropriately.
  • Since the rest break time is paid, the employee does not need to clock out. However employers may want to consider having their timekeeping records reflect that the rest period was provided to the employee.
  • Inform employees that they should notify human resources or an office administrator/payroll officer if they have been denied the opportunity to take a rest break.
  • If a rest break is interrupted, either pay nonexempt employees one hour at their regular rate of pay if they miss a rest break during the workday or restart the rest period that was interrupted. However, be aware that if the timing of the rest breaks is routinely off you may run into trouble. For more information, see Premium Pay for Meal and/or Rest Break Violations.
  • Review your Wage Order(s).
  • Update your rest break policies. CalChamber's Employee Handbook Creator can help.

If you think you qualify for an exemption from the rest break rules, consult legal counsel regarding applying for an exemption

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