As employers with California employees are well aware, California wage-hour law is about the strictest in the country, mandating such things as meal and rest breaks for employees who are not exempt from overtime under the administrative, professional, executive or other exemptions. Under section 226.7 of the California Labor Code and section 2(O) of most of California’s Wage Orders, employers must provide a ten-minute rest period for every four hours, or major fraction thereof, worked. At issue is the nature of the rest period and whether employees must be completely relieved of duty.

On December 22, 2016, the California Supreme Court issued a ruling in Augustus v. ABM Security Services on rest breaks establishing that employers (1) may not require “on-duty” rest periods, and (2) may not require non-exempt employees to remain “on-call” by having to carry pagers or radios during their rest breaks. By requiring security guards to carry radios during their breaks to be on call in case of emergency, ABM violated the Labor Code and the Wage Orders. Following a lawsuit filed in 2005, a trial court had awarded a class of 14,000 security guards $89.7 million on summary judgment in 2012. The case was reversed by an appellate court, but the Supreme Court reinstated the trial court’s ruling, finding that requiring employees either to stay on the premises or to carry a radio meant that the employees remain under an employer’s control and are essentially working. “A rest period, in short, must be a period of rest.” It also found that although the law does not specifically mention time spent on-call, “one cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communications devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest periods.”

In a concurring and dissenting opinion, two justices found no basis for awarding a nearly $90 million judgment “that was premised on the incorrect assumption that a person who is ‘on call’ . . . to remain reachable in case of emergency is necessarily also ‘on duty.’”

One ray of hope in the opinion for employers is that the Court noted the ability of employers to petition the Division of Labor Standards Enforcement for an exemption from the rest period requirement where it “would not materially affect the welfare or comfort of employees and would work an undue hardship on the employer.” Examples of employers who might seek such an exemption include employers of emergency personnel or of employees who work alone and cannot reasonably leave the premises without compromising operations.