Workers waiting ‘on call’ must be paid, court rules

Shoppers walk in front of a Abercrombie & Fitch store in San Jose. The retailer opposed a change to practices that let companies force employee to call in for shifts without pay. Shoppers walk in front of a Abercrombie & Fitch store in San Jose. The retailer opposed a change to practices that let companies force employee to call in for shifts without pay. Photo: Paul Sakuma / Associated Press 2008. Photo: Paul Sakuma / Associated Press 2008. Image 1 of / 1 Caption Close Workers waiting ‘on call’ must be paid, court rules 1 / 1 Back to Gallery

Employees who are required to stay “on call” before the start of a possible work shift — phoning their employer two hours before the shift to learn whether they’re needed — are entitled to be paid for that two-hour period regardless of whether they’re called in to work, a state appeals court ruled Monday.

In a 2-1 decision with potentially broad impact, the Second District Court of Appeal in Los Angeles said on-call employees are protected by a 1943 California Industrial Welfare Commission wage order, still in effect, that entitles employees to “reporting time pay” as soon as they are required to report for work.

The employer in this case, a retail clothing store, argued that the law mandated payment only for the hours an employee was required to report at the workplace. But the appeals court said the law also protects employees who are required to report in by telephone, committing their time to the employer.

Workers facing on-call shifts “cannot commit to other jobs or schedule classes during those shifts,” must make child care arrangements and have to give up time for recreation or socializing, said Presiding Justice Lee Edmon in the majority opinion. By contrast, she said, “unpaid on-call shifts are enormously beneficial to employers,” who can maintain a “large pool of contingent workers” and pay them only if they need them.

In dissent, Justice Anne Egerton said the 1943 reporting time order was intended to require pay only for employees who “must physically appear at the workplace” and that any changes should be left to the Legislature. She noted that a federal judge had interpreted the law that way in a separate case, although the federal ruling is not binding on other courts.

The ruling is “a great victory for employees,” said Patrick McNicholas, a lawyer for the sales clerk who filed the suit after being denied pay for time spent on call. McNicholas said many retail stores and restaurants follow a similar practice.

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There was no immediate comment from lawyers for Tillys, the clothing store in Torrance (Los Angeles County) where the clerk worked in 2012. The apparel chain Abercrombie & Fitch filed arguments supporting Tillys.

Tillys, based in Irvine, requires employees with on-call shifts to call in two hours before the shift would start and disciplines those who call in late or not at all, with potential firings for three violations.

The appeals court agreed with the employers that, when the 1943 “reporting time” wage order was written, employees reported to work by showing up at the workplace. But the court said the law was not drafted narrowly and must be interpreted in light of changing realities and technology.

For example, Edmon said, a 1978 state law that allowed members of a nonprofit mutual benefit corporation to copy other members’ “names and addresses” was interpreted by a state appeals court in 2010 to allow copying of email addresses as well.

Employers are requiring their employees to “report to work” when they mandate call-ins two hours before the start of a possible work shift, the ruling said. It said requiring pay during call-in time encourages employers “to accurately project their labor needs and to schedule accordingly,” and to “partially compensate employees for the inconvenience and expense associated with making themselves available to work on-call shifts.”

Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter:@BobEgelko