Decision: In Mendiola v. CPS Security Solutions, Inc., the California Supreme Court ruled that employers must pay certain workers for all time spent on the job, including time spent reading, watching TV or engaged in other personal activities, including sleep time, while the worker is on call. Security guards employed by CPS had filed a putative class action for unpaid wages for time spent on-call at the worksite in the evenings. The guards received no compensation for on-call time unless an alarm or other circumstances required that they conduct an investigation, or they waited for, or had been denied, a reliever.

The Supreme Court concluded that the guards were entitled to compensation because they were still under the employer’s control, even when they were asleep, because: (i) the guards were required to reside in their trailers, or elsewhere at the worksite, during on-call hours; (ii) they were obliged to respond, immediately and in uniform, if they were contacted by a dispatcher or became aware of suspicious activity; (iii) guards could not easily trade on-call responsibilities; (iv) they could only request relief from a dispatcher; (v) if no relief could be secured, guards could not leave the worksite; (vi) even if relieved, guards had to report where they were going, were subject to recall and could be no more than 30 minutes away from the site; and (vii) restrictions were placed on nonemployee visitors, pets and alcohol use. The Supreme Court further held that the mere presence of the security guards was integral to CPS’ business, such that the guards’ on-call time was spent primarily for the benefit of CPS.

Impact: California employers should review their on-call policies to ensure that they comply with this new decision and/or with the California Wage Orders applicable to their industry. In particular, California employers should assess whether their on-call policies and practices place significant restrictions on their employees, thereby potentially requiring compensation for all on-call hours worked.