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Overtime Class Action Decided By California Supreme Court

Many industries have on-call practices, in which employees are required to be on the employer’s premises, or be contactable by the employer (for example, by keeping a cell phone with them and turned on at all times). Workers are generally not paid for the time they spend on call, but one recent class action lawsuit alleged they should be.

Tim M., an employee of CPS Security Solutions Incorporated, filed the class action wage and hour lawsuit against the company alleging guards should be compensated for what the company refers to as “uncompensated free time”. This is time the guards are on-call and must remain on-site (usually on a construction site). They are allegedly allowed to sleep and watch TV during this time, but they are allegedly not permitted to leave the site, even for a family emergency.

The plaintiffs argue that having guards remain on-site confers a direct benefit to CPS Security. The company specifically used the constant presence of guards as a selling point when contracting to construction companies. On the one hand, it’s counterintuitive to pay employees for time they are not actively working. On the other hand, if the guards’ activities are restricted and requiring them to remain on-site does in fact confer a benefit to the employer, then it is alleged the employer should pay the guards for that time.

At one point in the dispute, CPS Security tried to strike a compromise, in which guards would be paid for “unpaid free time” on weekdays. The motion was denied, implying the court favored the plaintiffs’ argument that all of the guards’ on-call time should be compensated.

The wage and hour lawsuit was filed in California and worked its way up to the California Supreme Court. CPS Security argued that the federal law (which is less stringent than the relevant California labor law) pre-empted the state law. The California court disagreed, pointing out that the federal law provides a minimum to which everyone must adhere, but that California is free to make stricter laws that apply to all California residents.

The California Supreme Court ruled in favor of the plaintiffs, deciding that on-call time, where employees are required to remain on-site, is time for which employers are required to pay their workers. The Court determined CPS Security owed its employees wages for all the time they had spent on-call. Because the dispute involved a state labor law (as opposed to a federal labor law), the class action lawsuit has gone as high as it can go and the final decision was in favor of the plaintiffs.

This decision has the potential to affect businesses all over California. Many industries, including healthcare and emergency workers, all use on-call systems very similar to the one used by CPS Security. Now that the California Supreme Court has ruled that on-call time is time for which guards of CPS Security should be paid, the door has been opened for workers in other fields to file similar lawsuits. The decision could ultimately affect the way many industries conduct business in the state of California.The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips against Mortgage Brokerage, Real-Estate Brokerages, financial services companies and private security firms. We have offices conveniently located in Oak Brook and Chicago, Illinois. Contact the Naperville and Hinsdale overtime lawyers and attorneys at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent financial advisor associates, loan and mortgage brokers who have not been paid overtime and have been mis-classified as managers.