Many classes of California workers are entitled to “reporting time pay,” which is partial compensation given to employees who go to work expecting to work a certain number of hours but are deprived of working the full time due to inadequate scheduling or lack of notice by the employer.  Prior to the California Court of Appeal’s decision in Skylar Ward v. Tilly’s, Inc. most employers understood that such pay was only required if the employee physically appears at the workplace.  In that decision, however, the Court of Appeal told those employers that they were wrong.

Like many cases with wide-reaching implications, the facts in Tilly’s were simple.  Plaintiff worked as a sales clerk in a Tilly’s clothing store located in Torrance, California.  During her time at Tilly’s, Plaintiff and other employees were scheduled for a combination of regular and “on-call” shifts.  While regular shifts had concrete starting and stopping times, the “on-call” shifts required Plaintiff to call in approximately two hours before the start of her shift to determine whether she needed to come to work.  If the answer was yes, then Plaintiff was required to appear at work and would be paid for a regular shift.  If, however, the answer was no, then Plaintiff would not show up to work and would not receive any wages.

Plaintiff filed a putative class action alleging that she and other employees scheduled for these “on-call” shifts were entitled to reporting time pay under the applicable California wage order.  The superior court disagreed and sustained Tilly’s demurrer to Plaintiff’s complaint without leave to amend.  Plaintiff appealed that ruling and the Court of Appeal reversed.

The Court’s analysis focused on the requirement that reporting time pay need only be provided when the employee “is required to report for work” and whether reporting to work required an employee to physically appear at the workplace.  The Court analyzed the language of the wage order, its regulatory history and purpose, and other relevant California Supreme Court authority and concluded that it did not require physical appearance.  In reaching this conclusion, the Court also emphasized the detrimental impact of the on-call policy on Plaintiff and other similarly situated employees.

The Court’s opinion included a lengthy dissenting opinion focused primarily on the contention that the original drafters of the wage order in question intended it to only apply to an employee physically appearing at the workplace.  While appearing to accept this original intention, the majority of the Court ultimately found it nondispositive in light of the regulatory history and purpose.

The Court’s decision leaves many questions unanswered.  In rejecting Tilly’s public policy arguments, the Court explicitly stated that it was not holding that employees are entitled to reporting time pay whenever they contact their employees to determine what their schedule is; it was only determining that Tilly’s on-call policy as alleged implicated the reporting time pay provisions.  This begs many questions including:

• How much advance notice must be given in order to avoid reporting time pay obligations?
• Would the analysis differ if a different form of notice was at issue, i.e., email or text message?
• Does its decision have retroactive application?

Despite these questions, what is clear is that California employers should promptly audit their scheduling policies in order to ensure that they are in compliance with both the letter and spirit of Tilly’s and the wage order’s reporting time requirements.  For those employers with scheduling policies similar to the one at issue in Tilly’s, they should immediately review that policy to determine in what ways (if any) it can be distinguished from the policy in Tilly’s.  

Stoel Rives will continue to monitor this case to determine if it is adopted by other appellate jurisdictions or taken up for review by the California Supreme Court.