CA Court Finds Employer not Obligated for Reporting Time or Split Shift pay, but Denies Employer Prevailing Party Fees

Under California law, employees may be entitled to additional compensation if they show up for a regularly scheduled shift but then are sent home early, or, if the employee works a split shift in a single day. Pursuant to Cal. Code Regs., tit. 8, § 11040, subd. 5(A), "each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee‘s usual or scheduled day‘s work, the employee shall be paid for half the usual or scheduled day‘s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee‘s regular rate of pay, which shall not be less than the minimum wage. Additionally, a split shift is a "work schedule, which is interrupted by non-paid non-working periods established by the employer, other than bona fide rest or meal periods." When an employee works a split shift, one (1) hour‘s pay at the minimum wage shall be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment. (Cal. Code Regs., tit. 8, § 11040, subd. 2(Q) and 4(C).)

This additional pay was at the center of a class action dispute. Former customer service representatives of AirTouch Cellular filed suit against their employer, arguing that they were not paid "reporting time pay" or "split shift pay" when they had to show up for mandatory meetings. Though the employees were paid for the hours actually spent at the meetings, they claimed that they were owed "reporting time pay" for having to attend the meetings on their days off, and/or "split shift pay" for attending the meetings, and then having to return later that day to work a shift. The employer was able to successfully defeat the claims of two of the putative class members by way of a motion for summary judgment. Thereafter, the employer sought an award of attorney's fees from the employees under Labor Code section 218.5, which allows a prevailing party to recover reasonable attorneys fees in an action which was brought for wages. The employees argued that Labor Code section 1194 (which allows for the recovery of attorney's fees only for a prevailing plaintiff) was controlling, not Labor Code section 218.5. The trial court ultimately awarded roughly $250,000 in attorney's fees to the employer. The employees appealed. 

On appeal, the Court of Appeals considered all three issues. First, the Court held that the “reporting time pay” claims were appropriately disposed of by the trial court in that the employees were scheduled for these short meetings, and when they arrived, they worked at least half, if not more, of the scheduled time, and were thus not entitled to additional pay. On the other hand, if the employees were scheduled for a two-hour meeting, but the meeting only lasted 30 minutes, the employees would be entitled to reporting time pay. 

Second, the Court of Appeal held that the employees were not entitled to “split shift pay” because the employees were paid in excess of minimum wage and thus, paid more than they would have received had they been paid minimum wage plus a split shift premium.  

Third, though the rulings came down in favor of the employer on the other issues, as it pertained to attorney’s fees, the Court of Appeals determined that the employer was not entitled to an award of such fees. The Court looked to Labor Code section 1194 which provides that only the plaintiff is entitled to recover attorney’s fees in a dispute over unpaid wages. Since the dispute here centered upon unpaid split shift and reporting time pay, the Court held that even if the employer was the prevailing party, it could not recover attorney’s fees.