A federal court in California recently held in a class action case that employers satisfy California’s split shift wage regulation if they pay their employees who work split shifts at least the minimum wage for the actual time spent working plus one additional hour at the minimum wage rate. (Galvez v. Federal Express Inc.pdf., No. 3:07-cv-02505 (N.D. Cal. April 28, 2011)).

The Galvez lawsuit was brought as a class action against FedEx by several subclasses of FedEx drivers and couriers. Among their claims was that under California Industrial Wage Commission Wage Order 9, section 4(C), employees who worked split shifts were entitled to receive their regular wages for the hours they worked plus a premium of one hour’s pay at the minimum wage. FedEx filed a motion for partial summary judgment and argued that section 4(C) does not automatically entitle California employees who work split shifts to an extra hour of pay at the minimum wage rate. Rather, section 4(C) only requires that employees who work a split shift receive at least the minimum wage rate for the hours they worked plus an additional hour at the minimum wage rate.

Section 4(C) provides: “When an employee works a split shift, one (1) hour’s pay at the minimum wage shall be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment.”

FedEx argued that under the proper reading of the Wage Order, the plaintiffs were not entitled to any additional compensation. For example, on May 30, 2006, plaintiff Alexander Galvez worked and was paid for 9 hours and 15 minutes on a split shift. While Galvez was not paid an additional premium for working a split shift, he was paid more than $69.19, the applicable minimum wage for 10 hours and 15 minutes of work. Thus, FedEx claimed, Galvez and the other such plaintiffs were not entitled to any additional compensation. In contrast, the plaintiffs argued that under the Wage Order employees who work a split shift are entitled to receive their regular wages for the hours they worked plus a premium of one hour’s pay at the minimum wage for working a split shift, regardless of the total amount of wages paid.

The court agreed with FedEx and granted its motion for partial summary judgment. The court found that section 4(C) is not ambiguous and that the plaintiff’s interpretation would violate principles of statutory construction by substituting “regular wage” for “minimum wage.”

As an interesting side note, FedEx cited helpful language contained from the 1978 version of the Division of Labor Standards Enforcement manual. While the pertinent language was removed from later versions of the manual, FedEx relied on a declaration from Gregory Rupp, former assistant chief (1995-2003) and acting deputy chief (2003-2004) at DLSE, to state that the omission from later editions “is not an indication that the DLSE discontinued this method of determining compliance with the split shift requirement . . . .” Rupp also testified that “if an employee’s wage rate was higher than the applicable minimum wage, the amount of regular wages that exceeded minimum wage was credited toward the split shift premium.” While the plaintiffs objected to the court’s consideration of the Rupp declaration as improper expert testimony on the interpretation of law, the court disagreed and found the declaration to be permissible evidence of how the regulation was interpreted in practice.

The Bottom Line: California employees who work split shifts are not automatically entitled to an extra hour’s pay at the minimum wage rate. However, employers with California employees who work split shifts and are paid at or near the minimum wage rate should check their policy to make sure these employees are being paid in compliance with California law. These employees must be paid at least the total of the number of hours worked in a split shift x California minimum wage rate + one additional hour at the California minimum wage rate.