Aguilar v. Association for Retarded Citizens
285 Cal. Rptr. 515, 234 Cal. App. 3d 21, 30 Wage & Hour Cas. (BNA) 889 (1991)
Rule of Law:
Under California wage orders, employers must compensate employees for all hours they are subject to the employer's control, including periods when they are permitted to sleep during work shifts that are less than 24 hours long, because such time constitutes "hours worked."
Facts:
- The Association for Retarded Citizens (ARC) is a state-funded, nonprofit organization that provides care for mentally handicapped individuals in group homes throughout the Imperial Valley.
- ARC employs individuals at these group homes to stay with the mentally handicapped residents, overseeing their housekeeping, meals, homework, and other needs.
- The employees involved in this case worked a four-day work week, with four days on and three days off, following a specific schedule.
- For the first two days of their work week, employees would work an 8-hour shift from 2 p.m. to 10 p.m., after which ARC required them to stay at the group home for an overnight work shift.
- During the overnight shift, from 10 p.m. to 6 a.m., employees were on call but were allowed to sleep, typically provided a bed or sofa bed in the group home’s study room, which also generally contained a telephone.
- From 6 a.m. to 9 a.m. on these days, employees actively worked, helping residents with morning routines and preparing them for school, and were then free to pursue their own interests until 2 p.m.
- ARC's policy was to pay employees for the 10 p.m. to 6 a.m. overnight shift only if they received less than five hours of sleep or spent more than three hours assisting residents; otherwise, employees would receive no compensation for that time.
Procedural Posture:
- Several employees of the Association for Retarded Citizens (ARC) filed claims with California’s Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE) against ARC for unpaid wages.
- DLSE concluded that employees who worked less than 24-hour shifts were entitled to compensation for hours when they were subject to the employer’s control, even while permitted to sleep.
- Beginning in 1984, the employees sued ARC in municipal court for unpaid wages, and these cases were eventually consolidated.
- ARC brought a motion for summary judgment in municipal court, contending that, as a matter of law, the employees were not entitled to wages for sleep time.
- The municipal court judge granted summary judgment in favor of ARC, reasoning that the DLSE’s policy was an unenforceable regulation adopted without complying with statutory procedures.
- The employees appealed the municipal court's decision to the appellate division of the superior court, which affirmed the municipal court’s ruling.
- At the employees’ request, the appellate division of the superior court certified the case for transfer to the California Court of Appeal for a hearing and decision.
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Issue:
Is an employer required by California wage orders to compensate employees for time when they are on call and permitted to sleep during work shifts that are less than 24 hours long?
Opinions:
Majority - Kremer, P. J.
Yes, an employer is required to compensate employees for time when they are on call and permitted to sleep during work shifts that are less than 24 hours long. The court based its conclusion on Wage Order 5-80, section 2(H), which broadly defines "hours worked" as all time an employee is "subject to the control of an employer." This definition clearly includes periods when an employee is required to be on the employer's premises and subject to control, even if allowed to sleep. The court upheld the Division of Labor Standards Enforcement (DLSE)'s interpretation, finding it was a valid application of the existing Wage Order rather than an improperly adopted new regulation, distinguishing it from cases like Armistead and Ligon. The court rejected ARC's argument for an exemption, emphasizing that the Wage Order explicitly differentiates between employees working 24-hour shifts (where sleep time may be excluded by agreement) and those working less than 24-hour shifts, with no such exclusion provided for the latter. The court deemed ARC's attempt to characterize shifts with temporary releases as 24-hour shifts an unreasonable and non-commonsense interpretation that would nullify this clear distinction. Furthermore, the court found the federal Department of Labor's (DOL) interpretation unpersuasive, as it ignored federal law's own distinction between shift lengths and based an exemption on a questionable "home-like environment" premise for employees who maintain separate residences. Finally, the court noted that federal law controls only if it is more beneficial to employees than state law, and in this instance, the California rule requiring compensation for all controlled hours was clearly more beneficial.
Concurring - Work, J., Froehlich, J.
Justices Work and Froehlich concurred with the majority opinion's reasoning and conclusion.
Analysis:
This case significantly clarifies the interpretation of "hours worked" under California wage orders, particularly for employees in residential care settings who work overnight or non-traditional shifts. It reinforces that employers must compensate employees for all time they are required to be on the employer's premises and subject to their control, even during periods of permitted sleep, unless a specific, statutorily defined exemption for 24-hour shifts (requiring a written agreement) applies. The ruling emphasizes the courts' deference to administrative agency interpretations when they are consistent with the plain language and intent of the regulations, preventing employers from unilaterally reclassifying shorter shifts to avoid compensation for sleep time. This decision has broad implications for employers in caregiving and similar industries, underscoring the importance of accurate classification and compensation for 'on-call' or 'controlled' time.
