Docking employee payIntroduction

As with so many legal issues, a determination as to when it is legally permissible to “dock” an employee’s pay for rest periods requires knowledge of employment law and an analysis of the particular circumstances. This article, written by our leading wage and hour attorney, highlights circumstances in which docking employee pay for rest periods in California is appropriate, as well as instances when it is unlawful.

California Code and Wage Orders on Rest Periods  

Most employers understand that the law prohibits an employer from deducting various items from an employee’s wages.  With respect to break time, for instance, Labor Code Section 226.7 (d) provides: “A rest or recovery period mandated pursuant to a state law, including but not limited to, an applicable statute, or applicable regulation, standard, or order of the Industrial Welfare Commission, the Occupational Safety and Health Standards Board, or the Division of Occupational Safety and Health, shall be counted as hours worked, for which there shall be no deduction from wages. This subdivision is declaratory of existing law.”   (Emphasis added).  It is this prohibition which raises the question in many employers’ minds as to whether they can dock an employee’s wages for returning to work late from authorized rest periods.

The obligation to provide rest periods is imposed not by the Labor Code, but solely by the wage orders. Under applicable wage orders, employers must “authorize and permit” nonexempt employees to take a 10 minute rest period for every four-hour work period or major fraction thereof.  See, e.g., Wage Order No. 1-2001, §12 (A) (8 Cal. Code Regs §11010 (12)(A)).

In addition, under California’s wage orders, work time is the time which “is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” See, e.g., Wage Order No. 1-2001, §2(G)(8 Cal. Code Regs §11010 (2) (G)). (The “control” element of the Industrial Wage Commission Wage Orders constitutes a “substantial difference” from federal law, indicating that California’s definition of compensable work time is broader than the federal law definition.  2002 Division of Labor Standards Enforcement Policies and Interpretations Manual §§46.1.1, 47.4.2 (rev. 2009)).

California Court Interpretation of the Code and Wage Orders

In Cervantez v. Celestica (C.D. Cal. 2009) 618 F. Supp. 2d 1208, Plaintiff employees clocked in and out of work, and were paid for the time between clocking in and clocking out. However, before Plaintiff employees could enter defendant employer’s facility, they were required by the employer to pass through security screening. After passing through security screening, the employees clocked in at one of the time clocks within the facility. At the end of their shifts, the employees were required to clock out at one of the time clocks, and then had to pass through security screening before leaving the facility.

The employees brought a class action against the employer, asserting that they should have been paid for the additional time from the time they arrived at defendant’s facility until they clocked in, and the additional time from the time they clocked out until the time day passed through screening again and left the facility. The District Court agreed with Plaintiff employees, ruling that during the screening processes at the beginning and end of the day, the employees were not able to “use the time effectively for their own purposes,” and, therefore, were under the control of the employer. Therefore, the employer was required to pay them for the time they spent standing in the screening lines before and after they clocked in and clocked out of work.

The California Supreme Court reached a similar result in Morillion v. Royal Packaging Co. (2000) 22 Cal. 4th 579, in which the plaintiff employees were not free to come and go as they pleased during their pre-shift period, because they were held captive within the employer’s shuttle which drove them from a designated point to their place of employment.

Rest Period Hypotheticals

For purposes of analysis, consider this hypothetical: An employer hires an employee at a rate of $10 per hour. The employee’s work schedule is 8:00 AM to 4:30 PM, with a 30-minute break for lunch at 12:00 noon. As required by law, the employer provides the employee with a 10 minute rest period in the morning and another 10 minute rest period in the afternoon. The employer treats these rest periods as work time as mandated in California. Thus, the employee’s scheduled work day is an eight-hour work day and the employee is paid for eight hours, with no deduction for his or her rest periods. However, what if, instead of taking 10 minute breaks, the employee actually takes 25 minutes for each rest period—an additional 30 minutes per day beyond what is mandated by California law and authorized by the employer?

Fact Scenario No. 1

Under Scenario No. 1, let’s say the employee is free to do what he or she wants during the employee’s rest periods.  He or she may leave the employer’s premises and is not subject to recall by the employer. Does this mean that the employer’s action in docking the employee’s pay for the half-hour represented by the unauthorized 30 minutes taken by the employee is appropriate?

Because the 10 minute mandated rest periods are considered time worked, the employer may require his employees to remain on the premises during those rest periods. However, the employer need not require the employee to remain on the premises. If the employee is not required to remain on the premises, and is not subject to recall by his or her employer during the rest periods, the employer may deduct the 30 minutes of unauthorized break time by the employee.

In this case, one might say that the employer is “docking the pay” of the employee for the half-hour of unauthorized rest time the employee takes during the day.  However, one might view the term “docking the pay” of an employee to mean that the employer is “deducting” pay from the wages earned by the employee for taking unauthorized break time, and that would be an incorrect inference.

Instead the analysis first considers the portion of mandated break time required by California, for which the employee must be paid as set out above in Labor Code §226.7(d). The analysis must then turn to the unauthorized 15 minutes breaks taken by the employee, as a separate issue, since those unauthorized 15 minute periods are not mandated pursuant to state law. These minutes are not considered as time worked if the employee does not remain under the control of the employer during the additional break time, and not subject to the control of the employer. Since they are not considered as time worked, the employer may pay the employee $75 per day ($10 per hour x 7.5 hours = $75), which are the full wages due to the employee for work performed and the employer has not actually “deducted” anything from those wages.

Fact Scenario No. 2

Now consider Scenario No. 2: The employee is not permitted to leave the employer’s premises during the authorized and mandated 10 minute rest periods, and is subject to recall by the employer during that time. Under this scenario, the 15 minute unauthorized and non-mandated break time taken by the employee is considered time worked. That is because during this period, the employee is under the control of the employer. Therefore,  the employer is required to pay the employee for the unauthorized 30 minute breaks per day. The result is different from Scenario No. 1 because the employee is not permitted to leave the employer’s premises and, therefore, is under the employer’s control during that time.

This is not to say, of course, that the employer has no remedy for the employee’s tardy return from his or her work breaks. The employer can suspend the employee for violating the employer’s policies, and may even terminate his or her employment.

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Gehres Law Group’s business litigation and employment law attorneys are intimately familiar with the wage and hours laws, and provide free initial consultations to employers and employees who have issues concerning employment matters.  We hope this article has been informative. If you have questions about your employment law matter, we invite you to call us at (877) 333-2420 or (858) 964-2314 or contact us through this website.