Employment Law Blog

News, trends and analysis in employment law and HR

May 27, 2014

Establish proper work agreement for employees residing on worksite (CA)

Wage and Hour 

For employees living on the work premises, the employer should have a written agreement clarifying which of the employee’s hours are paid and which hours are unpaid; otherwise, all 24 hours per day may be compensable

For employees living on the work premises, the employer should have a written agreement clarifying which of the employee’s hours are paid and which hours are unpaid; otherwise, all 24 hours per day may be compensable. A federal district court in California recently ruled that an employee of a residential facility for mentally disabled individuals was entitled to full payment for all hours that the employee spent “on call.”  Since the employer had not created an agreement with the employee to deduct “sleep time,” the employee was entitled to full payment for the time spent sleeping on the premises (Muan v. Vitug, ND Cal, Apr. 2014).

Employees must be given at least 5 hours of uninterrupted sleep time, otherwise the time is compensable. A federal district court in California recently ruled that an emergency medical technician and security guard at a steel plant assigned to a 24 hour shift must be compensated for sleep time despite having a written agreement to exclude it from compensation. Since the employee was only given 4 hours of sleep time according to the agreement, and the time was not uninterrupted since the employee was still required to respond to emergencies within 2 minutes, the employee should have been paid for that time. The court ruled that sleep time must be at least 5 hours of uninterrupted time in order to be deducted from wages (Sperry v. Securitas Security Services, USA, Inc., ND Cal, Apr. 2014).


If you have employees residing on company property, make sure you are following the rules below:

Question: What are examples of employees living on work premises?

Answer: A manager of a residential care facility, a security guard, or a fire watch employee in a forest.


Question: If an employee maintains a home off of the work premises, can they be deemed to “reside” on the employer’s premises?

Answer: According to a recent Administrator interpretation letter from the U.S. Department of Labor (DOL), even if an employee maintains a home elsewhere, an employee will be deemed to “reside” on the employer’s premises if the employee works and sleeps at the worksite for:

1. Five days a week (120 hours or more); or
2. Five consecutive days or nights (regardless of the total number of hours). 


Question: What is required for employers to be able to deduct up to 8 hours of sleep time from an employee’s compensable time?
Answer:

1. The employee is provided private quarters in a homelike environment;
2. The sleep time is at least 5 hours of uninterrupted time;
3. A reasonable agreement is reached in advance regarding compensable time, and
4. The agreement should normally be in writing to preclude any possible misunderstanding of the terms and conditions of the individual’s employment.

Question: If an employee works a 24 hour shift, is any sleep time able to be deducted?
Answer: An employee must receive 5 hours of uninterrupted sleep time in order to deduct sleep time on a 24 hour shift. If an employee does not receive at least 5 hours of uninterrupted sleep then none of the employee’s sleep time may be deducted.

Question: Is there any other time that can be deducted from an employee’s compensable time?
Answer: Meal periods of at least 30 minutes can be unpaid if an employee is relieved of all duties.

Question: What determines uninterrupted sleep?
Answer: Sleep time when the employee is not expected to work or does not actually end up working in response to, for example, an urgent call.

Tips: Under federal law, employers can exclude up to 8 hours per day for sleep time, and up to 3 hours per day for meal periods, plus any other time that the employee does not need to stay on the premises, as long as the employee does not actually end up working during that time. In California, these exclusions depend on what specific Wage Order applies. Refer to Vigilant’s Legal Guide, “Compensation Rules for Extended Shifts” (1346).  In addition to sleep time, make sure that you are setting clear policies for meal and rest periods. Lingering questions? Please contact your Vigilant staff representative, we will be happy to answer any questions.

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