Big win for California on-site on-call employees. CPS Security Solutions, Inc., a California employer was delivered a crushing blow when the California Supreme Court ruled that the company’s compliance with a federal employment law that permitted the exclusion of compensation for sleep time was irrelevant in determining CPS compliance with California employment law. In Mendiola v. CPS Security Solutions Inc. the dispute was whether California’s Wage Order 4 was being adhered to by CPS. In determining that CPS’s wage policy violated the Wage Order 4, CPS and other California employer’s will now have to determine what retroactive effect if any the ruling will have on their compensation policy for employees.

The California On-site On-call Employees of CPS

The ruling in Mendiola requires that on-call security guards employed by CPS at different construction worksites are entitled to retroactive pay for 24 hours of work, despite the fact that their same employees only actively worked 8 hours per day. Originally, the on-call security guards employed by CPS had a written agreement with the company to reside in trailers provided by CPS. While residing at these trailers, the on-call/site security guards were allowed to rest and enjoy other leisure activities, though with some limitations. The guards were compensated at an hourly rate for all time spent patrolling their construction worksite. However, no compensation was received for time spent on-call at the worksite trailers unless an alarm went off or other circumstances required the attention outside of the trailer, or during the time spent waiting to be relieved from work by another guard. Ultimately guards were only paid for their time spent patrolling sites, and time spent in the investigation of disturbances occurring at the site.

The difficulty in this case is the fact that CPS did not intend to violate California state law when developing its compensation plan for on-site, on-call employees. In fact throughout the 1990s CPS worked with the California Labor Commissioner in order to ensure that the compensation policy in place, which excluded sleep time at the trailers, was in compliance with relevant federal and state law. The basis for this suit was a request by CPS for a declaratory relief action, requesting assistance from the California courts to review the compensation plan, and to also rule on its viability. Ultimately it was determined that though the federal law provided an express provision allowing the exclusion of sleep time in compensation, this fact was irrelevant in the determination of whether CPS was in compliance with state law because, as the court put it, California “is free to offer greater protection.” As a result, subject to Wage Order 4, CPS will be required to retroactively pay its employees for their rest time while on-site and on-call.

The ruling in the CPS case is interesting in that it does not involve an employer attempting to thwart labor employment law. In fact the unfavorable ruling was the result of CPS attempting to ensure their compliance with California state law. However, the holding means that other employers in California who do not pay compensation for rest time at on-site locations for on-call employees could be required to provide retroactive compensation to these employees. If you have any legal questions regarding California’s wage and compensation laws, and live in Sonoma County, Mendocino County or Lake County California contact the attorneys at Beck Law P.C. in Santa Rosa today.