California Supreme Court: Exit Security Checks in Personal Vehicles Are Compensable

April 4, 2024

On March 25, 2024, the California Supreme Court held that workers are entitled to compensation for time spent undergoing exit security checks that included an inspection of their personal vehicle. In the same decision, the court addressed the compensability of travel time to and from a construction site under California law and whether employees are entitled to payment when they are required to remain on the employer’s premises during their meal periods.

Huerta v. CSI Electrical Contractors is the California Supreme Court’s latest opinion addressing what time qualifies as “hours worked” under the wage orders issued by the California Industrial Welfare Commission (IWC). According to the opinion, George Huerta, a union-represented construction worker at the California Flats Solar Project, filed a putative class action alleging violations of California wage and hour law. Huerta argued that he and his co-workers were entitled to compensation for time spent driving on a dedicated access road on the project’s premises, and for time spent waiting for and undergoing security inspections while in his vehicle when leaving the worksite at the end of the day. Huerta also sought compensation for the time he and other workers spent taking unpaid meal periods when they were required to remain on the premises.

The questions analyzed in Huerta arose under IWC Wage Order No. 16, which only covers employers in the construction, drilling, logging and mining industries. But the ruling is likely to have broader implications due to the overlap with parallel provisions in wage orders applicable to other industries.

The California Supreme Court’s ruling in the class action case answers three questions certified to it by the U.S. Court of Appeals for the Ninth Circuit:

  1. Is time spent on an employer’s premises in a personal vehicle and waiting to scan an identification badge, having security guards peer into the vehicle and then exiting a security gate compensable as “hours worked” within the meaning of IWC Wage Order No. 16?
  2. Is time spent on an employer’s premises in a personal vehicle, driving between the security gate and the employee parking lots, while subject to certain rules of the employer, compensable as “hours worked” or as “employer-mandated travel” within the meaning of IWC Wage Order No. 16?
  3. Is time spent on an employer’s premises, when employees are prohibited from leaving but not required to engage in employer-mandated activities, compensable as “hours worked” under IWC Wage Order No. 16 or under Labor Code section 1194, when that time was designated as an unpaid “meal period” under a qualifying collective bargaining agreement (CBA)?

The Court’s Analysis

Answering the first question in the affirmative, the California Supreme Court ruled that “when an employee spends time on his employer’s premises awaiting and undergoing an exit security procedure that includes a vehicle inspection causing delay and that is mandated by the employer for its own benefit,” that time qualifies as compensable “hours worked” because the employee is subject to the employer’s control. The court emphasized that the determining factor is the degree of control exerted over the worker, not just that the activity is required by the employer.

Huerta argued that the requisite control existed here because he was required to drive to the security gate, wait in his vehicle for his turn to undergo the security check, roll down his window and present his security badge to the guard, and submit his vehicle to a visual or physical inspection. The California Supreme Court agreed, finding several factors contributed to a level of control warranting compensability, including the confinement on the employer’s premises during the security check, the imposition of specific tasks on the worker and the degree to which the checks serve the company’s interests rather than those of the worker.

As to the second question, the court held that time spent by a construction worker driving on an employer’s premises between a security gate and the parking lot near the actual worksite is compensable, but only if the security gate is the “first location” where the employee’s presence is required by the employer based on an “employment-related reason” other than mere access to the worksite. In these circumstances, the driving time qualifies as compensable “employer-mandated travel” under a unique provision found in Wage Order No. 16.

The high court declined to opine whether the security gate was the “first location” where the presence of Huerta and other workers was required by CSI due to conflicting evidence in the record before the court. Huerta and some workers claimed CSI management told them the security gate was the “first location” they needed to report to at the start of the day, but other workers submitted declarations denying that claim.

In a twist, the California Supreme Court held that the same driving time was not compensable as “hours worked.” Huerta argued he and other workers were entitled to payment for this time because they were required to comply with general worksite rules (such as safety rules; anti-discrimination and anti-harassment rules; alcohol and drug policies; and rules prohibiting smoking, horseplay, gambling and playing loud music) and with “rules of the road” (such as adhering to speed limits and driving only on the designated road). The California Supreme Court disagreed. Similar workplace rules govern workers while on their employer’s premises at virtually all workplaces, the court observed, and finding that such rules trigger an obligation to pay would effectively require employers to compensate workers for the portion of their commute that necessarily occurs on the employer’s property as they travel to their actual workplace within the premises.

Finally, as to the third question, the court held that workers must be paid for time they are required to stay on the employer’s premises during meal periods — even when workers are covered by a CBA that would otherwise exempt them from certain of California’s meal period requirements that might trigger a meal period violation. The California Supreme Court explained that while employees could negotiate for meal periods that might not have the same characteristics as the meal periods provided under the California Labor Code, they could not negotiate away their right to be paid minimum wages for all hours worked. As such, if employees are unable to leave the premises during their meal periods, they are under their employer’s control and must be compensated for such time.

The Huerta decision is unlikely to be the final chapter in the California Supreme Court’s continued efforts to interpret the state’s provisions governing compensation for hours worked, travel time and meal periods. Employee advocates are certain to raise Huerta in other pending cases, and employers should review their policies and practices to mitigate their legal exposure.

For additional information regarding Huerta and its impact on an employer’s wage and hour obligations in California, please contact the authors or any other member of McGuireWoods’ Labor & Employment Department.