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Are You Working After Punching Out?

California wage laws may not recognize federal ‘de minimis’ exception

If a speck of coffee grounds falls on the counter, does it make a sound? What about when you multiply that single bit by 2,874? That’s the number of Starbucks coffee shops in the state of California, and, theoretically, roughly the number of hourly employees required to perform certain end of the day closing shift duties after they’ve mandatorily clocked out for the day. They should receive overtime pay.

FLSA ‘De Minimis’ Rule

In Troester v. Starbucks, Inc., a former Starbucks employee asserts that he is due more than one full day of pay for the amassed time spent carrying out required work duties while off the clock. The federal Fair Labor Standards Act (FLSA) requires that employees be paid for all work time, with a notable exception referred to as the ‘de minimis rule’—when the amount of unpaid wages is so small as to make it insignificant, commonly thought to be up to 10 minutes.

Examples of allowed unpaid circumstances include time spent turning off the lights, or having a bag searched for less than a minute before or after the workday. This rule emerges from the notion that “the law cares not for trifles,” a legal guidepost intended to prevent costly and time-consuming litigation over matters of no consequence.

However, for minimum wage workers, an entire day’s pay accrued over the course of a year may be significant. And, if a company underpays its workers by even an admittedly small degree individually, the cumulative amount in dispute can rise into the millions, as in the case against Starbucks.

In addition, the origins of the ‘de minimis rule’ can be traced to 1946, during an era when small increments of time were difficult to document accurately for recordkeeping—particularly when a literal time clock sat inside the building and employees would clock in with a time card. By comparison, today we have cell phones and apps that could quite easily take up this slack.

California Law More Protective of Employees

California’s state wage and hour law provides more protections to employees than federal law. As such, it may go further to require payment in circumstances where the FLSA would not. At issue in the Troester case is whether California state law recognizes the de minimis exception—and, if so, what amount may be considered so minimal as to justify nonpayment of an employee. A lower court in Troester did find that a de minimis exception would apply, and granted summary judgement in favor of Starbucks. But in the California Supreme Court review, justices focused on the modern ubiquity of technology that could accurately measure an employees work to the minute. It is worth noting that Starbucks has since changed its company policy to compensate employees for precisely the activities and time at issue in the Troester case.

While the details of the de minimis doctrine under California labor law may take years to hash out, it remains the law that every employee must be paid their hourly wage for the number of hours worked, and employees may not waive this requirement. If you need help assessing a wage issue, labor laws or unpaid overtime, talk to an experienced employment law attorney for legal advice.

For more information about this area, see our overviews on employment law for employees and wage and hour laws.

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