What Constitutes “De Minimus” for Wage and Hour Laws

While this blog is dedicated to my primary area of practice: representing companies against unions, I am also an employment lawyer. As an employment lawyer, companies seek my counsel regarding wage and hour issues among other human resource-related things. This California case is relevant to all companies that have employees, regardless if they are in a union. It deals with the de minimus doctrine, which essentially says that companies mustn’t pay employees for small amounts of time worked off the clock that are administratively difficult to record. But what constitutes small?

Plaintiff-employee Troester alleged that Starbucks computer software required him to clock out before initiating the software’s “close store procedure” on a separate computer terminal. The close store procedure transmitted daily sales, profit and loss, and inventory data to Starbucks’ corporate headquarters. Troester said that after he initiated the software’s close store procedure, he activated the alarm, exited the store, locked the front door, and walked his co-workers to their cars in compliance with Starbucks’ policy. He occasionally reopened the store to allow employees to retrieve items they left behind, waited with employees for their rides to arrive, or brought in store patio furniture mistakenly left outside.

The De Minimus Doctrine provides that employers may be excused from paying wages for small amounts of otherwise compensable time upon a showing that the time is administratively difficult to record precisely.

Over Troester’s seventeen months of employment with Starbucks, his unpaid time for store closing tasks total less than thirteen hours, or just over $100.00 in unpaid compensation at the applicable minimum wage. The court dismissed his lawsuit pursuant to the de minimus doctrine. Troester appealed the decision.

The Appellate Court noted that no California wage and hour statute, regulation, or wage order has incorporated the de minimus doctrine found in the Federal Fair Labor Standards Act. Second, and equally troubling for employers, the Court stated that although California has a general de minimus rule that is a “background principle of state law,” the rule is not applicable to the facts presented by Troester because California law does “not allow employers to require employees to routinely work for minutes off the clock without compensation.”

However, if one minute setting an alarm, one minute leaving the store, fifteen seconds locking the door, and thirty five seconds walking a co-worker to his or her car is not sufficiently brief in duration to qualify as de minimus, one wonders what is. An employer may have more success arguing that brief activities are de minimus if they occur infrequently than if they occur regularly.

To be clear, the California Supreme Court’s decision applies only to wage and hour claims brought under California’s state law.  It does not apply to claims brought under the Fair Labor Standards Act, or does it apply to claims brought under the laws of other states.

Employers that use computer log-on and log-off times for timekeeping purposes will be well served to examine what activities, if any, are performed by employees outside of the time they are logged into their computers.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.