Closing Time for California Employers Who Short Workers’ Wages at the End of Shifts

On July 26, 2018, the California Supreme Court ruled that Starbucks cannot rely on the de minimis doctrine to combat its ex-employee’s claims for unpaid wages when closing the coffee shop at the end of the day.  The ruling is a significant win for hourly workers as it ensures that Golden State employers cannot duck liability when failing to pay workers’ wages for only a few minutes of work per shift.

Specifically, in Troester v. Starbucks, California’s highest State court held that the de minimis doctrine, which excuses the nonpayment of small amounts of wages to workers and often is applied in wage cases under the federal Fair Labor Standards Act (“FLSA”), does not apply when an employer requires an employee to work off-the-clock for several minutes per shift under California wage-and-hour laws.  Indeed, Starbucks had a practice where it required employees to clock out prior to undertaking approximately 4 to 10 minutes of tasks to close the store, including turning off the computer system, locking the doors and ensuring that other employees completed all outstanding tasks.  The court found that the “relevant statutes and wage order [in California] do not allow employers to require employees to routinely work for minutes off-the-clock without compensation.”

As highlighted in the Starbucks ruling, “[w]hat Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”  Workers should recognize that, in addition to state labor laws, the FLSA also provides that employers must compensate workers for all identifiable time worked.  Notably, employers may round their workers’ time in instances where an employer utilizes time clocks, but it is imperative that the employer’s rounding system does not unfairly limit the time worked by employees.  Workers should review their time records and paystubs to ensure that their employers are properly compensating them for all hours worked and not using a time clock system that captures time worked in a manner that always rounds against the worker.