Public agencies are exempt from most requirements of the state Industrial Welfare Commission’s (IWC) wage orders, including provisions on daily overtime.  However, the state minimum wage requirements in each of the wage orders do apply, and so the California Supreme Court’s new Mendiola v. CPS Security Solutions, Inc. decision regarding an employer’s obligations under state wage orders may impact some public employers.

In Mendiola, the Supreme Court ruled that on-call hours for employees residing at a worksite are considered hours worked under Wage Order 4.  The FLSA provides that employees residing on an employer’s premises on a permanent basis or for an extended period of time are not considered to be working for all the time the employee is on the premises, and CPS argued this same principle should be read into Wage Order 4.  The Court disagreed and concluded that CPS had to count all of the resident employees’ on-call time as hours worked because the employees remained under CPS’s control and the time was spent primarily for CPS’s benefit.  The Supreme Court also ruled that sleep time may not be excluded from 24-hour shifts under Wage Order 4.

The Mendiola decision may impact some public agency employers based on state minimum wage requirements for hours worked.  If an agency has employees who reside permanently or for extended periods at the worksite and may be subject to on-call time, and/or who work 24-hour shifts with sleep time excluded, the agency should ensure that the employees’ total compensation still meets the state minimum wage laws when the on-call time and sleep time are included as hours worked.

It is also noteworthy that the California Correctional Police Officers Association submitted a friend-of-the-court brief in this case supporting the employees.  It is possible that public employees may try to extend the Mendiola case to apply to public employer standards for on-call time and sleep time.  We do not believe this would be a strong position to argue given the Court’s reasoning in the case, but we would not want to be accused of being asleep on the job for failing to mention it.