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CALIFORNIA’S WAGE ORDER 7: What You Need To Know By Gina Gross KROST Restaurant Accounting & Consulting

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any restaurants have on-call policies that require employees to call in to find out whether they need to work their scheduled shifts in advance of their start time. In most cases, if the employee is told not to come in, the employee is not compensated for the shift. This month, in the case of Ward v. Tilly’s1, the California Second Appellate Court overturned a Los Angeles trial judge and ruled that requiring workers to call in to find out if they have to report for work before they start triggers California’s reporting time pay law.1 In this case, the plaintiff was a retail employee who was required to call in two hours before a scheduled shift to see if she should report to work. The on-call shift had a start and end time. She did not get paid if she was told not to physically report for work. In the Appellate Court opinion,1 on-call shifts “burden employees, who cannot take other jobs, go to school, or make social plans during on-call shifts—but who nonetheless received no compensation from the employer unless they ultimately are called to work.” In siding with the plaintiff, the Court wrote that this practice is precisely what reporting time pay in Wage Order 7 was designed to discourage. Wage Order 7 requires employers to pay employees reporting time pay, as follows: “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.”2 It is important to note that Wage Orders are issued pursuant to an express delegation of legislative power, which means they have the force of law. In light of the Court’s ruling that on-call shifts are considered eligible for reporting time pay, restaurant operators are encouraged to review and revise on-call policies with their HR professional or attorney that pertain to the compensation of employees who are told not to come in. As it stands now, employees who are “on call” but told not to come in must be paid at least two hours at the employee’s regular rate of pay. Businesses who require on-call shifts for staff, should be aware of and understand the impacts of the new law to ensure compliance. 

Second Appellate District Court Opinion - Skylar Ward V. Tilly’s, Inc. 2 Industrial Welfare Commission - Order No. 7-2001

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KROST QUARTERLY VOL. 2 ISSUE 2 - THE HOSPITALITY ISSUE

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KROST Quarterly Magazine: The Hospitality Issue - Volume 2 Issue 2  

KROST Quarterly is a digital publication released by KROST CPAs & Consultants headquartered in Pasadena, California. This issue will highlig...

KROST Quarterly Magazine: The Hospitality Issue - Volume 2 Issue 2  

KROST Quarterly is a digital publication released by KROST CPAs & Consultants headquartered in Pasadena, California. This issue will highlig...

Profile for krostcpas