The Trial Court Found for the Employer.

In a class action suit led by farm worker Jose Morillion, workers for Royal Packing argued that they were entitled to overtime wages and penalties because they weren't paid for time spent assembling at a designated meeting place, traveling on Royal's bus, waiting for the bus at day's end, and riding the bus back to a departure spot. Plaintiffs argued that this time was compensable because the employer required that it be done. The trial court rejected this argument, and the plaintiffs appealed the decision to California's highest court. 

The Supreme Court Holds for the Workers. 

The Supreme Court agreed with the employees, describing the assembling, traveling, and waiting time as "compulsory travel time." It explained that this was payable time because the workers were "subject to the employer's control." They did not also have to be "suffered or permitted to work" during this period (a phrase normally used to refer to the time spent actually doing work. Other examples may include work performed even when the employer doesn't ask for it, as happens with unauthorized overtime - coming in early and staying late - or time spent working at home. In this case, the Court did not even consider whether employees were suffered or permitted to work. It looked at something "less than work" - travel and waiting time - and made the employer pay for it simply because the employer required it.

Implications for the Hospitality Industry. 

Implications of this decision on California employers may be substantial, and may expose hotel and resort employers to significant penalties for wage and overtime violations. Employers must pay for time spent traveling from one "meeting place" to another work location (even if the "free ride" is paid for by the employer), as long as the employer requires employer-sponsored travel. The scenario is easy to imagine where a hotel requires its housekeeping staff to assemble at one hotel to work, then meet in the parking lot at a specific time to catch a ride to the next location, work there, and then meet again to ride to another hotel or to a departure spot, the employer will likely have to compensate the housekeeping staff for the time it has spent assembling, waiting, and traveling. The fact that the staff does not perform work during these times doesn't matter if the hotel requires the staff to assemble, wait, and travel. Under Morillion, employers that have failed to pay compensation for this time are liable for wage and overtime penalties.

How to Avoid Morillion-Related Wage and Overtime Penalties. 

To avoid substantial penalties, California employers need to review their compensation policies and ask:

• Do our policies require employees to gather at a specific meeting place before or after they perform work?
• Do we require our employees to travel to work sites on company-arranged transportation?
• Do we require employees to travel between locations in the same day, and meet at specific times and places in those locations?