California’s 4-Hour Minimum Pay Law Explained
The fundamental purpose of California’s "4-hour minimum pay" law is to protect non-exempt employees from being forced to work only a half day where the employer then requires the employee to remain on the premises the entire day, even though the employee would require only 4 hours to complete his or her work. It essentially prohibits the employer of a non-exempt employee from cutting short that employee’s time at work to a part-day shift standard, e.g . , offering to pay a non-exempt maintenance worker for only 4 hours of work, when the overall work day for company shifts is a full 8-hour day.
Places of employment generally affected by this rule include those offering maintenance workers, cleaning services, truck drivers (e.g., where trucks break down or run out of fuel), doctors, nurses, and educators. Notably this places of employment does not include employees who are regularly employed in trades or crafts, as they are excepted from this law.
Eligibility for California’s 4-Hour Minimum Pay
Not every employee in California will benefit from the 4-hour minimum pay guarantee. For one, the law only applies to non-exempt employees; i.e. those who are not exempt from the state’s overtime laws and who typically must be paid at least the minimum wage. Since many workers are non-exempt, the 4-hour minimum is expected to be particularly helpful for California retail, lodging, and hospitality establishments who regularly send those workers home early after a shift where it was slow or busy during a peak time load but who still must be paid the 4-hour minimum requirement and potentially time-and-a-half overtime.
Also, employers must have at least 5 employees in the state to be subject to the law. With this in mind, the 4-hour minimum might not have as significant of an impact on small business employers or on those who have only one individual employee in California.
Finally, certain public employees are not entitled to the 4-hour minimum pay guarantee. Specifically, this prohibition includes (but is not limited to) firefighters, police officers, and firefighters and police officers who are on meals/rest periods while on duty.
Exemptions and Exceptions
California’s 4-Hour Minimum Pay Rule includes notable exceptions and exemptions that employers and employees alike need to be aware of. California Labor Code Section 551 provides certain employees with a day of rest, which is defined in California Labor Code Section 552 as "any time of 24 consecutive hours rest…."
Charge nurses and assistant charge nurses are exempt from this section. Wage Order 4, Section 7, provides an exemption from the day of rest provisions of Labor Code sections 551 and 552 for "administrative or executive" charged nurses and assistant charged nurses who "spend a majority of their time performing nursing duties."
Employees working shifts of 6 hours or less are also exempt from this section under Labor Code section 552.
Union members, pursuant to Labor Code section 556, are exempt from the day of rest provisions in Labor Code sections 551 and 552 during the term of a collective bargaining agreement (CBA), so long as a day of rest is provided in the CBA.
Home health employees (including, but not limited to personal attendants and home aides) are also exempt under Sections 1(A) and 3(A) of Wage Order 15, which addresses application of the day of rest rule.
Employer Responsibilities under the 4-Hour Minimum Pay Laws
Employers Obligations Under California’s Four Hour Minimum Pay Law
To comply with the four-hour minimum pay law, employers must pay non-exempt employees for four hours of reporting time at the employee’s regular rate of pay. If an employee presents himself or herself to work at the request of the employer but is not put to work or is furnished less than half such employee’s usual or scheduled day’s work, the employer must compensate the employee for half-time pay, but not less than two hours nor more than four hours, at the employee’s regular rate of pay.
However, the law is not intended to provide for the payment of a full shift’s work where the installation or service call cannot be brough to the completion on that day. Rather, the employer should schedule the service call for a period of time when the job reasonably anticipates it may be completed. For example, if repair work will take one and a half hours to complete, the service employer must allow the employee at least a two-hour window to complete the work, otherwise, the four hour minimum pay rule applies, mandating a pay of two hours of pay at half time.
Employers are prohibited from filing a wage claim against a third-party service provider for reimbursement of the reporting time pay the third-party provider paid to its employees. In other words, the employer must issue the reporting time pay to the employee from their own funds. However, the employer may ask the third-party service provider to reimburse the employer for the reporting time pay. If a third-party provider does not immediately reimburse employers for the pay, an employer may still have to pay the minimum four hours of whether or not they receive reimbursement later.
If an employer violates the four-hour minimum pay rules, the employer must pay the employee ½ of the employee’s usual or scheduled day’s work at the employee’s regular rate of pay, but no less than two hours and no more than four hours. The employer must still pay the employee the necessary wages that were not payed in addition to the 2-4 hours of minimum pay.
Unique Situations and Examples
Consider the following scenarios where companies applied California’s 4-hour minimum pay rule and also failed to apply it:
- A well-known retail chain required employees to take an hour lunch that the company deducted from their paychecks. On some occasions the lunch ended up being substantially longer than an hour. The problem is, though, that the employees were being paid for their shift. In other words, they were guaranteed a certain amount of compensation for working a shift. If an employee is entitled to a guaranteed amount of compensation for the day, such as for working a shift, the employer is required to pay the employee four hours of pay, even if the employee works less than four hours. For example, if the employee showed up to work at 8:00 a.m., was forced to take his or her meal period, and then clocked out at 11:00 a.m., the employer is still required to pay the employee for at least 4 hours of work. This is the case even if the employee was being paid for a specific shift, such as one from 8:00 a.m. to 1:00 p.m.
- A state government agency hired workers at the beginning of the rainy season and sent them home after two hours of training. The agency had no choice but to send the workers home due to the inclement weather. However, the agency was still required to pay the workers for at least four hours of pay since they showed up for work and were sent home.
- An entertainment company scheduled a meeting for two hours , but the meeting only lasted 45 minutes. The company then tried to send all of the employees home to avoid any potential rain on the roads. The issue here is that even though the meeting was not scheduled for a full four hours, all of the employees were sent home before four hours had elapsed. Since they were sent home before four hours, they should have all been paid for four hours. The reasoning is that the company guaranteed to employ the workers for four hours. The amount of time is irrelevant because the "guaranteed hours" of work is what controls.
- A large consumer classified ad site in California heard complaints from its phone agents about the significant amount of time they spent on the phone and the limited number of hours they were scheduled to work. Thus, the company took steps to satisfy this complaint by allowing the phone agents to use idle time to log into and out of the system each day at their discretion and without restriction. At the end of each pay period, the phone agents were paid for a minimum of four hours on the days they worked. For example, an employee could work one hour and forty-five minutes and still be paid for four hours of work for that day. The company paid the phone agents in this manner because the company guaranteed that the phone agents would be employable for a minimum of four hours during each and every day the phone agents worked.
How it Stacks Up to Labor Laws in Other States
A comparison of California’s 4-Hour Minimum Pay Rule with similar laws in other states is instructive. Currently, just a handful of states have statutory minimum pay rules applicable to a daily work period. For example, New York requires that employees receive at least four hours of pay if they report to work but are given less than four hours’ work. Maine requires that employers pay nearly full-time pay to employees who are called into work but are given less than three hours of work. Both Michigan and Vermont require employers to compensate nonexempt employees ordered to appear for work but released from duty immediately or within two hours of reporting. New Hampshire makes a similar requirement if work is not provided within to three hours of reporting for work.
Similar state labor laws are notable but they are certainly rare. However, the state labor laws of most other states are inherently California-like. First, states that have statutory minimum pay rules, even if the period of time is for less than a full day, tend to incorporate the SGA and working time exclusion requirements of California law. For example, as noted above, New York law requires that employees reporting to work receive at least four hours of pay unless they receive satisfactory assurance that they no longer need to report to work within two hours for the commencement of their shift. New York does not seem to favor the idea that nonexempt employees should receive less than full-time pay unless they are granted time off for non-work periods or they are clearly told not to report to work before they do so.
Second, as already discussed in detail, the plain meaning of the California law (which requires that the employees be "required to report for work") compels an employer to "employ" an employee even if it does not require that employee to work. The lesson here is that where a state does make payment differential agreements and/or minimum pay a statutory requirement, the law should be strictly interpreted to compel an employer to pay.
Practical Advice for Employees and Employers
For Employees
It is important to remember the 4-hour minimum pay provision is what it is— a minimum. An employee is always free to take more time in order to receive a full day’s pay. For example, if an employee is continuously scheduled from 8 a.m. to noon, but ends his or her shift early for whatever reason— a doctor’s appointment, feeling ill, a child emergency, etc.— the employee will still have met the minimum requirement. The employer must pay the employee for 4 hours of work on that day unless the employee notified the employer beforehand. Therefore, employees should feel free to take advantage of the provision when they need to.
If an employee needs or wants to take less than a 4-hour day however, he or she must notify the employer beforehand. As discussed, the employer is not required to pay the employee for a minimum of 4 hours under this circumstance, but he or she had better be prepared for how the employer might react. Remember that if an employee does not feel comfortable speaking with his or her supervisor about work issues, he or she can also bring complaints to the attention of HR. Likewise, if an employee is not comfortable speaking with the employer to notify him or her that he/she will leave by 10:30 a.m., the employee may consider sending an email. If the communication is in writing , even if it is just an email, then the employer cannot discipline the employee for leaving early without his/her permission because the employee made an effort to give notice that complied with the terms of the provision.
For Employers
To avoid unpleasant run-ins with the Labor Commissioner, employers should make it clear in writing (or in an employee handbook) that employees should always be prepared to work at least 4 hours, and if an employee wishes to end the shift after less than 4 hours, he or she should give notice by either speaking to his or her supervisor before the shift starts, or notifying the employer by email. Documentation is key. It is recommended that employers maintain a written log of their employees’ hours. That way, in the event of a complaint to the Labor Commissioner, or a private lawsuit, the employer will have proof of the actual time worked by the employee. Keep in mind that posting all work schedules on a weekly basis, as discussed above, will encourage employees to use the email option discussed above, as the employee can then immediately respond with notice to the supervisor the schedule the employer prepared, and will have an easy reference to that schedule should he or she wish to end the shift after less than 4 hours at some point during the week.