‘No-Call’ for ‘On-Call’: Illegal Misclassification of ‘On-Call’ Shifts
A new form of wage theft has recently been identified, where employers misclassify employees’ schedules in order to shift the business expenses associated with scheduling to the employee. Illegal misclassification schemes have been around for decades. A common example is an employer misclassifying an employee’s job title, so that the employee is a salaried employee, in order to avoid paying the employee overtime. Here, the employers are misclassifying the employee’s schedules, instead of the employee’s job title, to avoid paying reporting time premiums.
This practice involves employers scheduling their employees to work “regularly scheduled” shifts and “on-call” shifts. For a “regular” shift, the employees report to work by physically showing up. For an “on-call” shift, the employees are required to report to work by calling in one to two hours prior to their shift, to determine whether they are needed to work that day. Further, the employers have store policies for the employees to treat “on-call” shifts as a definite schedule. Failure to call in is treated the same as not showing up to a regular shift, and is subject to discipline. Conclusively, “on-call” shifts are in actuality no different than a regular shift.
When the time comes to report to work by calling in, employees are oftentimes either placed on hold or told by the managers to call back later, leaving the employees with little to no notice of whether they will receive work hours. Because the responsibility is on the employee to call in, if the employee is unable to get a hold of the manager at the store, they must physically show up to work. In essence, the employees are required to report to work, however, are not necessarily given hours to work.
These “on-call” shifts allow employers to schedule the employees for full, or nearly full-time work, without the full time pay or providing them with benefits. This policy shifts the business costs of scheduling from the employer to the employee. Further, the employees are prevented from securing other work, educational opportunities, or being able to take care of personal needs. Most importantly, it prevents these employees from earning a living wage.
California law
This type of wage theft is actionable under California law. California, is one of several states, including New York, to require employers to pay its employees for “reporting time.” The applicable Wage Order in California, requires “that on each workday that an employee reports for work, as scheduled, but is not put to work or is furnished less than half of the 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.” (See 8 C.C.R. 11070; section 5.)
The policy and purpose behind the Reporting Time Pay laws are two fold: 1) to compensate for lost anticipated wages and expenses incurred in reporting to work, and 2) to incentivize proper scheduling and notice. (See DLSE Operations and Procedures Manual (1989) § 10.88; Aleman v. AirTouch Cellular, 209 Cal. App. 4th 556 (2012); California Manufacturers Assn. v. Industrial Welfare Com. (1980) 109 Cal.App.3d 95, 112; Price v. Starbucks Corp., 192 Cal.App.4th 1136, 1146.)
These policies incorporate a reasonable notice requirement into the reporting statutes. The employees must have some type of reasonable notice as to whether they will be given hours, or they should be compensated. Using the same policies, the San Francisco Retail Bill of Rights was recently amended to require retail stores to schedule employees 14 days ahead of time. Any scheduled changes shorter than 14 days notice require the employer to compensate the employee for one hour, per shift change.
However, these laws are not limited to solely “retail stores.” In fact, in California, the Industrial Welfare Commission lists multiple different industries that have a duplicative wage order, such as the manufacturing industry, amusement and recreation industry, and transportation industry to name a few. The Industrial Welfare Commission even includes a “catch-all” for all industries that were not covered by the Industrial Welfare Commission, and not otherwise exempted by law. (See 8 C.C.R. § 11170.)
Uber
Employers would be foolish for not only acquiescing to the needs of their employees, but to the recent market trend of maximizing excess capacity, as shown by the emergence of the “sharing economy.” Companies like Uber, have revolutionized their respective market by capitalizing on excess human capital. Uber capitalized on the excess capacity left over by private drivers, and simply anyone with a car, and took advantage of empowering employees/people, rather than crippling them.
There was a time where private drivers, similarly to our retail employees, would drop off a client at 9 a.m. and have to wait five hours until 2 p.m. to pick them up, with nothing else to do in the interim. Uber capitalized on the opportunity and created a more efficient market by empowering these people, allowing them to not have to place their livelihoods at risk. The result - the near death of the taxi/private driver economy.
Further, companies have proven that it is possible to take principles from the sharing economy in creating more internal efficient systems. For example, Zappos, recently conducted a test pilot of the program at its call center. The program allowed for employees to create their schedule whenever they were available. During the busiest hours, the employees were paid more, than the non-busy hours.
Danielle Kelly, a Zappos employee, stated that the employees are to dictate their schedules while accounting for personal obligations. She stated, “Worker testimonials said it was a lifesaver. They could go home for an emergency and make that time up later in the week.”
The emergence of technology has provided a means for the employers to find alternative methods of scheduling their employees, such that, they are not crippling the employees and preventing them from earning a living wage. The time has come for the retailers to evolve with the available technology, and stop forcing their employees to put their lives on standby.