Apple Employees Win Suit

A quick post to relay the results of a California court ruling.  

The California Supreme Court recently ruled in favor of Apple employees allowing them to be paid for after shift security searches. Apple requires employees of their product stores to be searched after their shift, checking for stolen company products. Employees filed a class action suit claiming that they should be compensated for the time required to complete the searches. Failure to comply with the search policy can lead to being fired.

A federal district court had earlier ruled in favor of Apple. Stating that the employees had to prove that they were being restrained from leaving. The case then went to the U.S. 9th Circuit Court, who returned the case to state court for an interpretation of state law regarding compensation. The California Supreme ruled in favor of employees and the case now returns to the U.S. 9th Circuit Court. The ruling, as of now, does not affect other states as it was not a federal court decision. However, once the U.S. Circuit Court considers California's Supreme Court decision it may rule in favor of employees. Compensation for requirements after an employee is "off duty" may be interpreted differently and cause a ripple effect through the U.S. regarding employee pay and overtime.

This is not the first time a California ruling has affected employee compensation. In 2018, The California Supreme Ruled that employers must pay employees for "off the clock" activities such as locking up, setting alarms, and other administrative duties. There is a federal rule called the de minimis rule that says that employees can be required to work small amounts of time, less than ten minutes say, that would be difficult to track administratively. However, California courts ruled that the federal rule had not been adopted under California wage laws and, therefore, did not apply.

De minimis Rule

The "de minimis" rule came from the Supreme Court in 1946, stating that employers, when considering amount of time worked, may disregard time worked over shift when it amounted to seconds or minutes. The U.S. Department of Labor adopted a similar rule under 29 C.F.R. § 785.47, which states, insubstantial or insignificant periods of time beyond the scheduled working hours may be disregarded. 

Under the Fair Labor Standards Act (FLSA) regulations, 29 C.F.R. § 785.11, if an “employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.” The Portal-to-Portal Act, 29 U.S.C. §§ 251-62, amended the FLSA and relieves employers of the obligation to compensate an employee for activities such as: traveling to and from the actual place of performance of the principal activity and activities which are preliminary to or postliminary to the principal activity, which occur either prior to the time on any particular workday or subsequent to the time on any particular workday. 

This is a just a small sampling of the laws and precedents that would go into any court’s decision on compensation of employees after hours. There have been too many cases to cite here regarding compensation beyond work hours. Cases involving employee’s loading/unloading/resupplying company vehicles at home, answering phone calls, emails and texts. If California is the test, then the trend would lean towards the employee.

Small business owners have to take this into consideration as they apply policy. Whether for breaks, meal times, or after work communications, how employers pay employees may be changing.

Link for the Maryland Guide to Wage Payment and Employment Standards

History of leave

With the passing of mandatory paid sick leave by the Maryland legislature in January 2018 the idea for this post began as a look at the history of sick leave in the American workplace. Research revealed the reason why there are paid leave advocates. Leave from work, whether for sick or personal, is a relatively new concept as it applies to the American workplace. Still, this is probably a good topic for a little background.

During the agriculture phase of the America people worked as the farm dictated. Once the Industrial Revolution arrived factories sprung up with no shortage of workers. People lined up waiting for jobs. Employers could set wages and hours are they saw fit. There was little to no regulation. People worked six days a week for pennies an hour in deplorable conditions. If you missed work you weren’t paid or lost your job. These conditions continued well into the 20^th century until a president floated a new concept.

Starting a conversation

The idea of employee paid leave in the United States started with President William Taft in 1910 who thought that workers should have three months of vacation per year. Congress never bought into it but the conversation was started. Sixteen years later the work schedule began to change. The Ford Motor Company was one of the first, if not the biggest, company to offer employees a five day, 40 hour workweek. The policy went into effect in may 1926 at the urging of Henry Ford’s son, Edsel, who thought every man needed more than one a day a week for rest.

By the 1930’s, countries around the world had begun adopting paid time off for employees. The U.S. Department of Labor took up the fight again creating the Committee of Vacations with Pay to study why the U.S was so far behind the rest of the industrialized world. Nothing came from this committee.

It would be sixty some years later before the U.S government made significant changes. In 1993 the passage of the Family Medical Leave Act (FMLA) mandated twelve weeks of unpaid time off for workers to attend to their own or a family members medical issues. Leave from work agreements were, and still are, between employer and employee with no mandate for payment. While FMLA provided for leave without retribution from employers, the leave was still unpaid.  

There is not a statutory requirement for paid vacation in the U.S. Individual employers decide on what leave and type of leave to offer employees. Employer’s decisions on leave run the spectrum. A few companies are experimenting with unlimited leave while the majority offer some sort of paid time off. There are still small percentages that offer no leave.

Regarding statutory paid sick leave, currently nine U.S. states mandate it (Arizona, California, Connecticut, Maryland, Massachusetts, Oregon, Rhode Island, Vermont, and Washington). Expect that number to grow in the coming years.

Please share this and any post. See the blog archive for other posts about employee benefits.

Smoke 'em if you got 'em? August 2017

Employee implants July 2017

What's in your wallet? May 2017

Workplace monitoring May 2016

Overtime history May 2016

All expenses paid

Do you offer paid leave to your employees? How about paying for their vacations? A trend sweeping through the business world is doing just that. Companies are rolling vacation time, sick leave, and any other time off into one plan and offering their employees unlimited time off. While the concept is trending, the Society for Human Resource Management says that only 1% of U.S. employers are offering unlimited time off. Others are offering stipends, free adventure trips, and use of company properties to encourage employees to take a break. The consensus of all the new thinking being that happier employees are easier to retain and are more productive.

Abuse? There’s not that much. Companies that offer unlimited vacation tend to be invested in hiring responsible employees who can balance taking time off with getting their work done. While unlimited vacation can be hard for managers to implement, most employees aren’t taking advantage of the perk. They get overwhelmed by the possibilities or can’t find the right amount that they feel is a fair amount to take. Employees still feel that their reputation will be damaged if they are away from the office too much.

Americans only take about half of their earned vacation days adding up to some $50 billion in lost paid vacation. A study conducted by the U.S. Travel Association found that American workers averaged 16 days leave in 2013; down from 20 in 2000. While most companies praise workaholics, people that don’t ever take off may being harming themselves and the office culture. It’s been well proven that not being able to disconnect from work can be unhealthy, but those individuals may cause resentment and guilt among their coworkers. Oxford Economics conducted a survey that found that 13 percent of managers were less likely to promote employees who took all of their allotted vacation. The DIW Economic Bulletin published a German study in 2012 that indicated employees who took fewer days off earned almost three percent more than those who took all their vacation time. 

           

Too offer even more encouragement companies are giving cash or other incentives to use vacation days. Some are also experimenting with paying employees to take vacation by offering a percentage of their salaries as a stipend or bonuses to help pay for the vacation, with stipulations that they actually take a trip of at least five days and not just stay home. Companies that aren’t offering the time off or stipends are paying for Caribbean getaways or adventure type vacations. Again, the idea being that a company that is a great place to work will have higher employee retention. 

           

Those working at more traditional minded companies have countered with a plan of their own. Employees request what are becoming known as “workcations”. This is where the employee is granted leave (time away from the office) but they agree to telecommute while they are away. The employee pays for the trip, but the leave is not charged against their vacation days.

Critics wonder how much work is actually being completed while at the beach with your family. Some employers or tasks just aren’t logistically equipped to handle telecommuting. Those concerned for employee health question if employees are really benefitting from being out of the office. Workers like the idea of a change of environment and feel that more can be accomplished without the constant interruptions present in the office. Further they can get away while saving their leave for life’s emergency that pop up. Kenneth Matos, senior director of research at the Families and Work Institute, says: “Is the workcation detracting from the vacation you were going to have, or is it enabling the vacation you otherwise wouldn’t have had?”

Either way, both companies and employees are getting creative with their use of paid leave. Traditional time off is definitely changing.

Mazzella Investigative Solutions