Recent California Ruling May Impact Wage and Mileage Reimbursements for Field Employees

Recent California Ruling May Impact Wage and Mileage Reimbursements for Field Employees

Historically, many employers have not paid employees who work in the field for time spent or expenses incurred traveling from their home to the first customer of the day and back home from the last customer of the day. This could change after a recent decision holding that California employers may be responsible for wage and mileage reimbursements for field employees if it is determined that they were sufficiently in control of their employees or their vehicles during these “commute” times.

In Oliver v. Konica Minolta Business Solutions U.S.A., Inc. (2020) 51 Cal.App.5th 1,1 the court determined the employer was sufficiently in control of service technicians who maintained or repaired various brands of copiers or other devices, and, thus, the employees were entitled to wages and mileage reimbursement for their commutes from home to their first job site and back home from their last.2 The service technicians used their personal vehicles and the employer had specific requirements for the type of vehicle that must be used.3 In addition, the employees carried tools and parts supplied by the employer in their vehicles.4

While the employees ultimately decided which tools and parts to carry, the employer provided a target number for the amount of parts a service technician should carry.5 The employees were not allowed to store the parts in their residences. Rather, they were required to keep them either in their vehicles or at specified locations, with guidance for the parts being carried/stored in vehicles such as keeping them “organized” and “easy to locate.”6 Most did not report to the same location each day and did not stop at the employer’s field office before the first job site, although those who did so were compensated from the field office to the job site.7 Although the employer had no policy against passengers or running errands during a commute, as a practical matter, the available space in a service technician’s vehicle would have been limited depending on the volume of parts required to be carried, which would accordingly limit the service technician’s personal pursuits during these commute times.8

California Employee Reimbursement Requirements

In California, employers must compensate employees for all hours worked and for the employee’s necessary expenses, including all reasonable costs.9 “Hours worked” includes the time during which an employee is subject to the control of an employer.10 California’s Supreme Court previously indicated that working time does not generally include the commute to and from work, and is thus not compensable.11 As a result, most employers did not historically compensate home-based employees deployed in the field for time spent traveling to and from the first and last customer of the day.  However, in Oliver, the Court distinguished an employee’s compulsory travel time, which is compensable.12

Factors Determining Control of Employee Under Oliver

Expanding Morillion, the Oliver court considered several factors to determine whether a commute by an employee to or from a customer’s work site is subject to the control of the employer and is thus compensable, including:

  • Whether the employees’ use of personal vehicles is required
  • Whether carrying supplies by employees in their personal vehicles is required, either explicitly by the employer or as a practical matter
  • If required to carry supplies, whether the employees are able to use the commute time effectively for their own purposes (e.g. if employee performance criteria could be satisfied more readily by commuting with the supplies rather than spending time picking them up from the employer before driving to the first work site)
  • Whether the volume of supplies required to be carried in the personal vehicles restricts employees from their vehicle’s use for personal pursuits
  • Whether the nature of the controlled activity primarily serves and benefits the employer or the employee (e.g. commutes using optional employer-provided vehicles, even with restrictions on personal use, are not compensable)

Reimbursement Liability Under Oliver

If an employer does not supply vehicles, and instead relies on employees to use their own vehicles to travel to clients, but is sufficiently in control of its employees, or even just the space used in their vehicles, they may be required to reimburse mileage and pay for the commute time. For instance, wages may be owed if employees are required to travel with supplies directly from home to the clients because it would be easier to meet performance measures than if they first went to the office to get the supplies.

Similarly, wages may be owed if there are rules to store supplies in the vehicles, or if the space taken up by supplies limits the employees in their personal pursuits. On the other hand, employees who travel with minimal equipment (such as a laptop) and are not otherwise inhibited by a lack of space to run errands before or after visiting clients would likely not qualify for wages under Oliver. Furthermore, wages may be owed if an employer imposes particular rules for the vehicles that must be used and how to use them.

If you have questions about the implications of Oliver on your business practices, contact the employment attorneys at Carlson & Jayakumar LLP today at (949) 222-2008.

By T. Mark Tubis

  1. 264 Cal.Rptr.3d 248, 51 Cal.App.5th 1
  2. Oliver, supra, 51 Cal.App.5th at p. 1, 264 Cal.Rptr.3d 248, 51 Cal.App.5th 1.
  3. Id. at 1, 264 Cal.Rptr.3d 248, 252-253, 51 Cal.App.5th 1.
  4. Id. at 1, 264 Cal.Rptr.3d 248, 253, 51 Cal.App.5th 1.
  5. Ibid.
  6. Id. at 1, 264 Cal.Rptr.3d 248, 253-254, 51 Cal.App.5th 1.
  7. Id. at 1, 264 Cal.Rptr.3d 248, 252, 51 Cal.App.5th 1.
  8. Id. at 1, 264 Cal.Rptr.3d 248, 264, 51 Cal.App.5th 1.
  9. See Cal. Code Regs., tit. 8, § 11040; Lab. Code, § 2802.
  10. See Cal. Code Regs., tit. 8, § 11040, subd. 2(K).
  11. See Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 594, 94 Cal.Rptr.2d 3, 995 P.2d 139.
  12. Id. at p. 587, 94 Cal.Rptr.2d 3, 995 P.2d 139.

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