Employees who live in employer-provided housing as part of their job may not so easily claim wages for 24-hour periods of work under California’s Wage Orders, according to a recent opinion, Mendiola v. CPS Security Solutions, Inc., Case No. B245019 (July 3, 2013). Mendiola involved a class of security guards who were employed at various constructions sites across California. On weekdays, the guards were scheduled from 5:00 to 7:00 a.m. and from 3:00 to 9:00 p.m. On weekends the guards patrolled from 5:00 a.m. to 9:00 p.m. From 9:00 p.m. to 5:00 a.m. on weekends and weekdays, the guards were to remain on call at the construction site where they were provided trailer residences for their exclusive use during the on-call time.

The guards filed suit seeking damages for failure to pay wages during the on-call period as required under the applicable Wage Order, Order No. 4, as well as for declaratory relief seeking a determination whether the on-call compensation policy was unlawful. CPS cross-claimed for declaratory relief and the parties filed cross-motions for summary judgment on the declaratory relief causes of action. The trial court granted the guards’ motion for summary judgment, finding that CPS’s level of control over the guards during the on-call period was such that the on-call time should be considered “hours worked.” CPS appealed.

The Court of Appeal held that CPS must compensate the guards for the nighttime hours during the week but are permitted to deduct eight hours for sleep time on the weekend days when the guards are on duty for 24 hours. In reaching this conclusion, the court looked at CPS’s level of control, considering whether the restrictions on the guards’ time were directed toward fulfilling CPS’s requirements and policies, and whether the guards were so restricted that they could not engage in private pursuits. The court found that the on-call time during the week constituted “hours worked” under these factors, reasoning that the guards’ presence on site during the on-call hours performed an important function for CPS and its clients; and that the guards’ inability to leave substantially restricted their ability to engage private pursuits.

With respect to the on-call time during the weekend, however, the court looked to prior cases addressing similar claims for 24-hour periods of work under Wage Order No. 9, which contains a specific provision permitting an employer and employee to agree in writing to exclude sleep time from compensation. The guards argued because Wage Order No. 4 does not contain a similar provision, cases allowing for uncompensated sleep time under Wage Order No. 9 were inapplicable. The court of appeal disagreed, finding that the courts in the Wage Order No. 9 cases did not rely on that Wage Order provision to exclude the sleep time. Rather, those courts looked to the applicable Wage Order’s definition of “hours worked” and found it comparable to the federal definition, which permits an employer and employee to agree to exclude up to eight hours for “sleep time” when an employee (a) works a 24-hour period, (b) is provided adequate sleeping facilities, and (c) receives the opportunity to get at least five hours of uninterrupted sleep.

Therefore, the court held that sleep time may be excluded from 24-hour shifts for employees falling under any of the Wage Orders that include the same definition of “hours worked” found in Wage Order No. 9. The Mendiola decision offers potential relief for employers in many industries whose businesses require employees to remain on call for periods of 24 hours or more, provided that there is a written agreement, the employee is provided adequate sleeping facilities, and receives the opportunity to get at least five hours of uninterrupted sleep.