Assessing Impact of California Court Ruling on Compensating Hourly Workers

A few minutes here. Few minutes there. The time adds up when California hourly workers are regularly expected to do work after hours.

That was the message from the California Supreme Court in a unanimous ruling on July 26 that drew national headlines and could have broad implications for compensating hourly employees in the nation’s largest state.

California’s highest court, in Troester v. Starbucks, advised a federal appellate court that it rejects the federal “de minimis” standard where employers aren’t expected to pay employees for small, hard-to-track increments of work.

The full impact of the decision will play out as the case heads back to the federal court. The likely outcome is that under California law, snippets of regular or routine work at the beginning or end of shift will need to be paid. However, small increments of off-the-clock work not regularly expected of the employee may not require compensation.

You can read news coverage of the decision here, here and here. In brief, the court sided with a shift supervisor who sued Starbucks because the company failed to compensate him for time spent closing the store and reporting sales after clocking out. (Starbucks no longer asks employees to do these tasks off the clock, but the case has been winding its way through the courts since 2013).

As companies assess how this impacts their organizations, it’s natural for them to ask how this might affect workforce communication using an Employee Communication and Engagement (ECE) Platform.

Eric Steinert, a labor and employee partner at Seyfarth Shaw in San Francisco, said there’s a significant difference between this case and how hourly workers use ECE Platforms.

Eric Steiner - Partner at Seyfarth Shaw“The fact pattern in Troester involved regular post-shift activities that were an expected part of the job,” Steinert said. “Random, irregular, ad hoc tasks that are not necessarily expected of the employee, still might not be compensated. Use of (ECE Platform) would seem to be more ad hoc, irregular and not “expected” on a regular basis. That’s an important distinction.”

Still, it’s important to know what capabilities your ECE Platform has in place to help manage hourly worker access and compensation liability. For instance, Dynamic Signal has industry-leading features that already mitigate compensation risks.

The platform delivers company news directly to employees, wherever they are, so they have all the information at their fingertips to do their jobs more effectively. For organizations, Dynamic Signal enables the targeting of content, the auditing of platform access, and the measuring of engagement. For the workforce, it’s designed to be a voluntary benefit. Hourly workers get the same content available to salaried employees who typically have greater access to information – such as through corporate email, an intranet, or even breakroom bulletin boards.

That’s crucial because there are almost 80 million employees in the U.S. who punch a clock, according to a 2016 report by the Bureau of Labor Statistics. (Nearly 10 million alone are in California.) These workers often have the most contact with customers. In fact, they can be the most significant assets and persuasive ambassadors for brands when it comes to setting a positive public image.

ECE Platforms boost productivity and improve the efficiency of those hourly workers. At the same time, a platform is not a task management tool or a mandatory work requirement. That’s why Dynamic Signal designed unique functionality in 2017 called Member Usage Compliance that gives organizations greater control by creating an additional gate to the platform – further reinforcing that the platform is a voluntary benefit.

The feature enables employers to craft a notification for hourly workers when they log onto Dynamic Signal. Employers can clearly state there’s no obligation to visit the platform while off the clock and that workers will receive no additional compensation for using it. Employees must acknowledge that they understand the message by clicking a button before being allowed to access the platform.

It’s easy. It’s simple. It helps manage compensation liability concerns while keeping hourly workers in the know.

Member Usage Compliance is just one more reason why customers consider Dynamic Signal a trusted enterprise partner. We’ve built both flexibility and control into our platform that allows organizations to meet the challenges of communicating with dispersed, frontline workers as well as traditional, desk-bound employees. We also continue to build out innovative capabilities that enable companies to communicate with their hourly workers while minimizing any compensation risks.

Compensation liability for hourly workers is an important issue that organizations must navigate. It’s important to take more than a few minutes to explore how your ECE Platform, or ones that you’re considering, reduce potential risks.

Post Author

G.I. Sanders

G.I. Sanders is Senior Director, Creative Services at Dynamic Signal. He specializes in entrepreneurship, digital and social media, design, and marketing. G.I. is based in Dallas, TX with his wife and two sons. Passions include technology, startups, music, fitness and sports.