Recently, in Augustus v. ABM Security Services, Inc., the California Supreme Court upheld a $90 million award of statutory damages, interest, and penalties against an employer who required employees to remain on-call during rest periods, despite no evidence showing that any employee’s rest period was ever actually interrupted.  This holding has significant implications statewide, and employers in California should promptly review their rest break policies to ensure full compliance. 

ABM Security Services, Inc. (“ABM”) provides security guards to residential, retail, office, and industrial locations throughout California. The plaintiffs worked as security guards for ABM.  In the complaint, the plaintiffs alleged that ABM’s policy of requiring security guards “to keep their radios and pagers on, remain vigilant, and respond when needs arose” during rest periods violated state law by failing to provide the plaintiffs with uninterrupted rest periods.  ABM acknowledged that it maintained such policy, but argued that merely requiring the plaintiffs to remain on-call in case an incident arose satisfied its rest period obligations.  The trial court disagreed, finding that a rest period subject to employer control is indistinguishable from the rest of the workday.  According to the trial court, “an on-duty or on-call break is no break at all.”

The Court of Appeals reversed, finding that merely being on-call does not constitute work. The California Supreme Court granted review to resolve the issues of:  (1) whether state law requires employers to provide employees with off-duty rest periods and (2) whether employers may require employees to remain on-call during rest periods.

Regarding the first question, the Court relied on the plain language of Wage Order 4 and California Labor Code section 226.7, as well as guidance from the Division of Labor Standards Enforcement (“DLSE”), and found that the phrase “rest period” means just that — “a period of rest.” Therefore, employers must relieve employees of all duties and relinquish control over how they spend their time during rest periods.  According to the Court, this conclusion is further supported by opinion letters issued by the DLSE providing that rest periods must be duty free.

As for the second question, whether state law permits employers to require employees to remain on-call during rest periods was less clear based on the plain language of Wage Order 4 and section 226.7. The Court concluded, however, that an employer cannot satisfy its obligations to relieve employees of all work-related duties and relinquish employer control by requiring that employees remain on-call during rest periods.  The Court reasoned that a requirement to remain on-call during a rest period infringes on employees’ ability to use rest periods for their own purposes and constitutes a “broad and intrusive degree of control.”  According to the Court, this conclusion is most consistent with the purpose of Wage Order 4 and the Labor Code to protect employees with respect to working conditions, wages, and hours.

California employers should promptly review their rest break policies to ensure full compliance, including that they provide employees with the opportunity to leave work premises during their rest breaks. They should also review their pay practices to ensure that employees are provided premium pay when they are not provided fully-complaint rest breaks.  As a practical matter, employers with employees who must remain on-call during rest periods due to the nature of their work should consider applying to the DLSE for an exemption from the rest period requirement.