A California District Court in California recently issued a decision that will have big impact on one business, and may impact other trucking companies as well. The ruling is based on California’s wage laws, and will require Wal-Mart to make back payments to truck drivers for time they were under the company’s control, but were not compensated. The truck drivers suing for their backpay are asking for wages from 1993 to the present.
One story is reporting that the company may be liable for as much as $100 million, but Wal-Mart says they will appeal this decision. What is not clear at this point is whether similarly situated companies like Wal-Mart will become liable under the ruling that was handed down. If so, current payment practices and wage policies may need to be reviewed for companies doing business in and through California.
California Laws at Issue
California is known for its progressive rules, regulations, and laws when it comes to wages. The particular law at issue in this case is Cal. Code Regs., tit. 8 § 11090. This order requires that California employers pay their employees at least the minimum wage for all hours worked. But that makes sense, right? All employers everywhere have to pay at least the minimum wage. The issue in this cases arose with the meaning of hours worked and when an employee is under the company’s control.
As any reader of this blog will likely know, truck drivers’ employment is not like that of other professions. There are times when truck drivers are doing tasks they are not necessarily compensated for, like layovers, pre- and post-inspection reports and paperwork, wait periods, rest breaks, and more. At least according to company in this case, there was some doubt as to when the drivers should be paid and when not.
Under California law, hours worked means anytime a worker is under a company’s control. According to that definition, the workers in this case felt like they were not paid for ‘extra’ work they had to do. And that is why they brought the suit.
The Court’s Ruling
In this case, the U.S. District Court for the Northern District of California agreed with the workers. Citing past cases from California court, the judge in this case ruled that because the truck drivers were both under the company’s control during their non-paid tasks, and could be classified as productive employees during that time, they should have been compensated at least a minimum wage.
As discussed above, it is not clear how far reaching this decision will be for other California employers. But hundreds of trucking companies will be on notice and follow the case more closely. This is just another example of how important it is for trucking companies to be aware of both state and federal regulations as they do business, because the consequences for ignoring or wrongly interpreting these rules, laws, and regulations can be expensive. At Anderson and Yamada, P.C., we dedicate our practice to meeting the needs of trucking companies as they try to navigate the numerous trucking laws and regulations that exist. Contact us so we can serve you.