When Employees Must Be Paid for Commuting in Company Vehicles

In Hernandez v. Pacific Bell Telephone Company, the California Court of Appeal clarified when employees must be compensated for commuting in company vehicles.

Background: The employees (the plaintiffs) were current and former technicians of the defendant, Pacific Bell Telephone Company (“Pacific Bell”). As part of their job duties, the employees installed and repaired internet and television services in customers’ homes.

In 2009, Pacific Bell began the optional Home Dispatch Program (“HDP”) allowing technicians to take company vehicles home instead of returning the vehicles to the Pacific Bell garage. Under the HDP, technicians drove company vehicles, containing tools and equipment, to and from home each day. The technicians in the HDP were not compensated for the time spent driving to the first worksite in the morning and were not compensated for the time spent driving home after their last appointment. Each employee involved in the law suit participated in the HDP.

The employees sued Pacific Bell alleging they were owed compensation for the time spent traveling in a company vehicle, loaded with tools and equipment, between their homes and a customer’s residence.

Both parties filed motions for summary judgment or adjudication. In so doing, the employer argued compensation for commuting in a company vehicle is only required if commuting was mandated, whereas participation in the HDP was optional. The trial court agreed with the employer and granted Pacific Bell’s motion for summary adjudication. The employees appealed.

Analysis and Holding:  The Court of Appeal began its analysis by noting employees must be compensated for “hours worked.” The court then noted “hours worked” is time during which the employee is: (1) subject to the employer’s control; or (2) time the employee is suffered or permitted to work, whether or not required to do so.

First, turning to the “control” test, an employer requiring employees to take certain transportation to a work site subjects the employees to the employer’s control. Thus, travel time on employer required transportation constitutes “hours worked.” The appellate court applied that rule and found Pacific Bell did not require the employees take certain transportation because the HDP was optional. Therefore, HDP commute time was not “hours worked” under the control test.

Second, regarding the “suffer or permit” test, this prong is met when an employee is engaged in certain tasks or exertion that a manager would recognize as work. The test applies even when the employee is not subject to the employer’s control, such as unauthorized overtime that the employer knows about. The court dismissed the employees’ argument that driving company vehicles with tools and equipment meant that employees were working when driving to and from home. The court noted that employees were not expending effort when driving around with the tools and equipment, thus they were not suffered or permitted to work. Therefore, HDP commute time was not “hours worked” under the “suffer or permit” prong.

In sum, the court affirmed the trial court’s decision, and found that the employees’ time spent commuting in company vehicles loaded with tools and equipment was not compensable time.

Significance: This decision may assist employers by clarifying when employees must be paid for commuting in company vehicles. Employees must be compensated for commuting in company vehicles if the employees are: (1) taking certain transportation required by the employer; or (2) expending effort on tasks that a manager would recognize as work. Therefore, merely commuting in a company vehicle loaded with tools and equipment is not enough to qualify as “compensable time.”

Of note, California law states that time an employee spends commuting to and from work in a vehicle that the employer provides may be considered hours worked, as long as the vehicle is not used for ridesharing purposes, as defined in Section 522 of the Vehicle Code. Cal. Labor Code § 510(b).

If you have questions regarding whether your workers must be compensated for their commutes, please contact the attorneys at Palmer Kazanjian Wohl Hodson LLP.