California Day of Rest Decision Highlights Issue, Requires Employers Take New Steps

This prohibition is not absolute. In a major exception, Labor Code section 554(a) allows “an accumulation” of unused days of rest “when the nature of the employment reasonably requires working seven or more consecutive days,” as long as “in each calendar month the employee receives days of rest equivalent to one day’s rest in seven.”
 
While California’s day of rest provisions are not new, they escaped interpretation by California courts until now. These requirements also have been relatively obscure. With its decision in Mendoza v. Nordstrom, Inc., the California Supreme Court finally determined the meaning of key parts of these Labor Code sections. Mendoza involved a lawsuit seeking to recover civil penalties under the Labor Code Private Attorney General Act for allegedly not giving required days off of work. 
 
The Supreme Court’s decision gave workable clarity on how to measure the seven-day period for which a day of rest may be required. The court also clarified at least part of one of the other exceptions. The Supreme Court’s interpretation of what it means to “cause” an employee to work more than six days in seven, however, requires action by many employers. Because the Court read that provision somewhat restrictively, including as requiring notice to employees, many employers will need to review their practices – and even take new steps.

The Decision’s Interpretation on Three Major Points

The Supreme Court limited its decision to three major points, as discussed below.
 
Seven-Day Period Means a Workweek: First, the Supreme Court confronted the overarching question of whether the seven-day period that may require a day of rest should be “calculated by the workweek, or does it apply on a rolling basis to any seven-consecutive-day period?” Recognizing that the statute is ambiguous, the Supreme Court concluded that the proper measurement period is the employer’s established workweek. It concluded: “A day of rest is guaranteed for each workweek. Periods of more than six consecutive days of work that stretch across more than one workweek are not per se prohibited.” The alternative – requiring a day of rest after any six consecutive days of work, on a rolling basis – would have been an administrative headache for employers. 
 
The Supreme Court read the day of rest guarantee to apply on a weekly basis, based on an employer’s “established workweek.” This workweek is the fixed seven-day period used for weekly overtime purposes. As a reminder, employers are free to set any fixed seven-day period as the workweek, as long as they consistently follow it. If an employer does not designate a workweek, the default workweek of Sunday to Saturday applies.
 
Exception for Employees Employed Six Hours or Less in a Day Means No Longer Day Worked in That Workweek:  The Supreme Court considered one exception to the general rule. Labor Code section 556 exempts employees “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.”  The issue here was whether the exception for working less than six hours in a day applies when an employee has at least one day with no more than six hours’ work during a one-week period, or if a day of rest for the week is not required only when an employee works no more than six hours on any day during that week.
 
The Supreme Court adopted the latter interpretation. It held that the “six hours of less” daily exception “is satisfied only if every daily shift that week has entailed six hours or less of work.” It applies only to those employees “who never exceed six hours of work on any day of the workweek. If on any one day an employee works more than six hours, a day of rest must be provided during that workweek, subject to whatever other exceptions might apply.” 
 
The Supreme Court described this exception as “a small relaxation for bona fide part-time employees.” It recognized, however, that Labor Code section 556 involves “two interrelated limits on day of rest protections.” As noted above, they are a weekly limit for employees who work 30 hours or less in workweek, and a daily limit concerning employees who work six hours or less in a day. The Supreme Court recognized that Labor Code section 556’s two limits could be read disjunctively (applying to employees who work either 30 hours or less in a workweek or six hours or less in a day) or conjunctively (requiring an employee work neither more than 30 hours in a workweek nor more than six hours in a day). The Supreme Court did not resolve this issue. It determined that interpreting the daily limit resolved the question at hand, leaving the larger issue unresolved.
 
What It Means to “Cause” an Employee to Work More Than Six Days in a Workweek: The Supreme Court also addressed what Labor Code section 552 means in its prohibition that an employer may not “cause” an employee to work more than six days in a workweek. This issue is important. Sometimes, because of the type of work involved or particular circumstances, an employer may need an employee to work all seven days in a workweek. Employees also often wish to work all seven days in a week – at least on occasion – in order to earn additional wages. As the Supreme Court recognized, California law contemplates employees possibly working all seven days in a workweek on at least some occasions, providing a special overtime premium for the seventh consecutive day of work in a workweek.
 
The Supreme Court made clear that an employer does not violate the day of rest requirement simply because an employee chooses to work seven days in a workweek. However, it determined that employers cannot force or encourage employees to forego an allowed day of rest, but also must inform employees of the right to a day of rest. The Supreme Court held that “an employer’s obligation is to apprise employees of their entitlement to a day of rest and thereafter to maintain absolute neutrality as to the exercise of that right. An employer may not encourage its employees to forgo rest or conceal the entitlement to rest, but is not liable simply because an employee chooses to work a seventh day.” The Supreme Court refused to limit “cause” to “instances of express requirements or compulsions,” which it stated then could “condone implied pressure that may nevertheless achieve an employer’s desired result.” Nonetheless, “cause” requires an employer’s “affirmative role in motivating or inducing action, not simply the passive failure to prevent action.” These descriptions gave only broad guidance, likely leaving many situations to be determined on a case-by-case basis.

Exceptions and What Employers Should Do Now

As mentioned, California’s day of rest requirement is not absolute. It does not preclude an employee from working all seven days in a workweek – or even from foregoing allowed days of rest – as long as the employer does not “cause” an employee to do so in a prohibited manner. In addition, the rules have several exceptions. First, as discussed, Labor Code section 554 allows an employer to require an employee to work all seven days in a workweek “when the nature of the employment reasonably requires” doing so, as long as the employee receives the equivalent number of day of rest otherwise required during the calendar month. Second, the same provision exempts “cases of emergency or … work performed in the protection of life or property from loss or destruction,” as well as “any common carrier engaged in or connected with the movement of trains.” Third, it also exempts a collective bargaining exemption, when a union agreement expressly exempts employees from the day of rest rules. Fourth, Labor Code section 554(b) allows the Labor Commissioner to exempt an employer from the rules when the Labor Commissioner determines “hardship will result” from applying them. Finally, as discussed, Labor Code section 556 exempts an employee “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.”
 
The Mendoza decision requires that employers pay new attention to the day of rest rules. The rules apply generally. However, they can have particular impact in some industries that have peak periods or seasons involving heavier work needs, businesses that operate all seven days in a week, have more part-time employees who work a number of days, have less predictable scheduling, or where employees have a lot of overtime. Industries that may be particularly impacted include retail, agriculture, restaurants, manufacturing, technology, and service sectors. Agricultural employees covered by Industrial Welfare Commission Wage Order No. 14 previously had a complete exemption, which the Legislature repealed effective on January 1, 2017. 
 
Because of potential civil penalty liability for violating the day of rest rules, employers need to review now whether their employees have the required days of rest made available. Although some employers may have very few, if any, employees subject to working all seven days in a workweek, all employers should review compliance. Employees also need to look carefully at whether any exceptions may apply. The holding that employers must “apprise” employees of the right to a day of rest is altogether new – the Labor Code, wage orders, and previous court decisions did not recognize such a requirement. Employers should consider the best way to do so. In addition, employers need to determine the best way to have employees work additional hours, if required, or to offer additional hours, in order to avoid any day of rest violation. In some instances, a written notice and acknowledgement may be advisable.
 
Employers are strongly encouraged to contact their employment counsel to review day of rest issues, and the best approach for compliance, following this decision.