Starbucks Has to Pay Employees for Off-the-Clock Work, California Court Says

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If you’ve worked a service or retail job, you’re likely well aware of all the little moments of work you aren’t paid for. Whether it’s locking up the store or booting computer systems, there’s plenty that companies get away with not paying employees for.


Now, a California Supreme Court decision may change that. The suit was brought against Starbucks by former assistant store manager Douglas Troester. Troester said in his suit that he wasn’t paid for minutes of work at the end of the day, when he had to clock out before using a computer system to upload information about employees. The court decided that Starbucks should have paid him for this time.

This decision could indicate a big change in labor laws, which since 1946 have allowed employers to shirk payments for what they call “de minimus” work—small amounts of work off-the-clock.

“Most courts have been, up until today, rendering rulings that if your employer doesn’t pay you for up to 10 minutes of off-the-clock work, that’s fine and they can nickel and dime you all they want,” Shaun Setareh, one of Troester’s lawyers, told Bloomberg Law. “Some studies that we looked at said Californians are being underpaid billions of dollars because of this rule.”

Unsurprisingly, employers are not thrilled by this decision. It sets a precedent that could apply to many California businesses, and lead to class action suits that could cost companies millions in unpaid wages.

Setareh and the court argued that technology has changed enough since the 1940s that companies should now be held accountable for accurately tracking employee hours.

Companies use sophisticated systems to track and predict aspects of their business like customer demand, Setareh said. A company as big as Starbucks should be able to come up with a system that can accurately capture employees’ work hours, he said. [...]

Many of the problems that the high court attempted to address 70 years ago existed because tracking employee hours meant punching a physical time card, Justice Goodwin Liu wrote for the California Supreme Court. Technological advances in the decades since can take advantage of tools like “smartphones, tablets, or other devices” to provide accurate timekeeping, he said.


The case isn’t settled yet. It’s currently in the Ninth Circuit federal appeals court, which will take into account the California Supreme Court’s decision. It was the Ninth Circuit that originally asked for an opinion from the state court on California law. Depending on what the Ninth Circuit decides, there could be major ramifications for corporations who have been able to get away with underpaying employees for decades.