The California Supreme Court answered a trio of questions from the Ninth U.S. Circuit Court of Appeals about "hours worked" under Wage Order No. 16, which governs the construction, drilling, logging and mining industries.
A solar power facility located on privately owned land in Monterey and San Luis Obispo Counties, the California Flats Solar Project was owed by First Solar Electric.
George Huerta was hired by a subcontractor, CSI Electrical Contractors, which was providing installation, construction and testing services at the site.
A designated road provided access between a guard shack located at the site's perimeter and the employee parking lots. A security gate was located on that road several miles from the guard shack; from the gate, it took Huerta approximately 10 to 15 minutes to reach the parking lots.
In the morning, vehicles formed a long line outside the gate, where guards scanned each worker's badge and sometimes peered inside vehicles and truck beds. At the end of the day, workers again formed a long line inside the gate, where the exit procedure took place, with delays from five to 30 minutes.
Because two endangered species were present near the site, the Department of Fish and Wildlife required First Solar to obtain a permit that imposed speed limits on the access roads and required clearing of the roads each morning of the species, which sometimes resulted in additional delays.
The permit also prohibited walking or biking from the gate to the parking lots, honking car horns, playing music that could be heard outside the vehicle or otherwise disturbing the local wildlife.
A collective bargaining agreement (CBA) provided for a 30-minute unpaid meal period. CSI did not allow workers to leave the site during the workday and instructed workers to spend their meal periods at a designated area.
Huerta filed a wage and hour class action, seeking payment for his time driving from the gate to the parking lots as well as his meal times. After the lawsuit was moved to federal court, the judge granted Huerta's motion for class certification as well as CSI's motion for summary judgment.
When Huerta appealed to the Ninth Circuit, the federal appellate panel certified three questions to the California Supreme Court.
First, the court asked if time spent on an employer's premises in a personal vehicle, waiting to scan an identification badge, having security guards peer into the vehicle and then exiting a security gate was compensable as "hours worked" within the meaning of Wage Order No. 16.
The unanimous court answered in the affirmative, relying on Frlekin v. Apple Inc., a 2020 decision that found time spent waiting for and undergoing required exit searches of employees was compensable as hours worked.
Huerta was under similar indicia of employer control as the employees in Frelekin, the court found, with the exit procedure strictly required for every employee, who remained confined to the employer's premises until the procedure was complete. He also had to perform specific and supervised tasks as part of the procedure, and the exit procedure requirements were primarily in service of CSI's own interests, the court noted.
"We thus hold that when an employee spends time on his employer's premises awaiting and undergoing an exit security procedure that includes a vehicle inspection causing delay and that is mandated by the employer for its own benefit, the employee—even when in his personal vehicle—is subject to the employer's control, and the time is compensable as 'hours worked' within the meaning of Wage Order No. 16," the court wrote.
Tackling the second question, the court wondered if time spent on the employer's premises in a personal vehicle, driving between the security gate and the employee parking lots, while subject to certain rules from the employer, was compensable as "hours worked" or as "employer-mandated travel" within the meaning of Wage Order No. 16.
Huerta's time could be compensable as employer-mandated travel, the court found, if he could present evidence not only that the employer required his presence at an initial location—the security gate—before mandating travel to a subsequent location (the employee parking lots), as well as that his presence was required for an employment-related reason other than accessing the worksite.
However, this time did not qualify as "hours worked," the court said. Time spent traveling on an employer's premises before or after work is not generally compensable, the court pointed out, and the "rules of the road" that Huerta said CSI imposed on him were standard in virtually every workplace.
"Huerta cites no authority for a rule that an employee is entitled to compensation whenever he is not permitted to drive wherever he wants, to go however fast as he wants, or to stop wherever he wants on the employer's premises," the court wrote, finding that the rules did not amount to the level of control sufficient to render the travel time compensable as "hours worked."
For the final question, the state's highest court considered if time spent on the employer's premises, when workers are prohibited from leaving—but not required to engage in employer-mandated activities—was compensable as "hours worked" within the meaning of Wage Order No. 16, or under the labor code when that time was designated as an unpaid "meal period" under a qualifying CBA.
CSI's argument that the CBA, which provided for a 30-minute unpaid lunch period, precluded payment under the wage order, held no sway with the court.
"To read the wage order as authorizing employees and employers to bargain away employees' right to be paid for an on-duty meal period, i.e., 'time worked,' would run afoul of the well-established principle that the right to a minimum wage under Labor Code section 1194, subdivision (a) is unwaivable," the court wrote.
Even when a qualifying CBA exempts employers from the requirement of Wage Order No. 16, the Labor Code requires that employees must be paid a minimum wage for meal periods when an employer's prohibition on leaving the premises or a particular area forecloses the employee from engaging in activities he or she could otherwise engage in if permitted to leave, the court concluded.
Under such circumstances, the employee remains under the employer's control despite being relieved of official duties because the employer is restraining the employee from engaging in otherwise feasible activities.
"Although a meal period's limited duration may impose some practical imitations on employees' freedom of movement, employees must retain the freedom to use the time 'for their own purposes' if a meal period is to qualify as off-duty," the court said. "Even at remote worksites, there is a meaningful difference between being required to eat at one's workstation or in a designated meal area and being allowed to return to one's personal vehicle or take a walk. In the latter situations, an employee may be able to make personal phone calls, take a nap, or simply enjoy a moment of quiet."
To read the opinion in Huerta v. CSI Electrical Contractors, click here.
Why it matters
To answer each of the three questions, the California Supreme Court focused on the level of employer control over the situation. In the first instance, the exit procedure was employer-mandated, for the employer's benefit and required employees to wait on site until they were checked out, while the rules cited by the plaintiff applicable to driving on site as part of the second question did not rise to the level of employer control sufficient to trigger compensation as "hours worked."
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