CPS Security Solutions, Inc. (CPS) provides "trailer guards" for construction sites in California. The guards spend the night at their jobsites in residential-type trailers. They are instructed to investigate alarms and to prevent vandalism and theft.
The guards were asked to sign an On-Call Agreement stating that the time between 9 p.m. and 5 a.m. are on-call hours and non-compensable unless they spent actual time investigating suspicious activity on the premises. The guards spent 16 hours on weekdays at the jobsite, 8 hours were paid and the other 8 were on-call. They spent 24 hours at the jobsite on weekends, 8 were paid, 8 on-call and 8 for unpaid sleep time. The guards sued CPS, claiming they should have been paid for all on-call hours, and for their sleep hours.
The California Supreme Court ruled that the security guards' on-call hours should be paid as hours worked. Hours worked includes “the time during which an employee is subject to the control of an employer.” An employee who is under the employer's control does not have to be “working” during that time to be compensated.
When an employer directs, commands or restrains an employee from leaving the work place and thus prevents the employee from using the time effectively for his or her own purposes, that employee remains subject to the employer's control. According to the definition of hours worked, that employee must be paid.
Even though on-call periods were designated as “free time,” the CPS guards cannot leave the premises unless relieved. They were required to take a pager or radio telephone, and are required to remain within 30 minutes of the site in case they are called back. They were forbidden to have children, pets or alcohol in the trailers and cannot entertain or receive friends or family without permission. Because of the degree of control exercised by the employer during the trailer guards' on-call time, such time is considered “hours worked,” per California law, and must be paid.
The Supreme Court also ruled that the employer must not exclude “sleep time” from the calculation of hours worked for employees with 24-hours shifts. The court noted that some wage orders do provide sleep exemption (such as those that govern ambulance drivers and attendants). However, Wage Order 4, which governs security guards, does not have this sleep exemption. Hence, sleep time is compensable for 24-hour shift employees.