A California court recently issued a decision clarifying when certain commuting time does not constitute work time under state law. In Hernandez v. Pacific Bell Telephone Company, the California Court of Appeal, Third Appellate District, held that an employer's provision of a company vehicle to employees to use in traveling from their homes to their first customer appointments of the day and home from the last appointments of the day did not transform commute time into "hours worked." This decision should come as welcome news to California employers that provide company vehicles for voluntary use.  

The plaintiffs in this case were a class of technicians who were allowed to use a company-provided truck loaded with all the equipment necessary to install video and internet service.  The company implemented this optional Home Dispatch Program (“HDP”) in 2009, allowing technicians to take a company vehicle home after their shifts rather than returning the vehicle to the company garage each night.  The issue was whether this program rendered the commuting time compensable. 

In affirming summary judgment in favor of the employer in this pre-certification class action, the court found that state, not federal, law governed the issue and analyzed the two-part definition of “hours worked” contained in the Industrial Wage Commission’s wage orders: “the time during which an employee is subject to the control of an employer,” and “all the time the employee is suffered or permitted to work, whether or not required to do so” and concluded that participation in HDP did not constitute hours worked under either definition.

With respect to the “control test” (the time during which the employee is subject to the employer’s control and thus working), the court analyzed several California state and federal cases finding that an employer’s provision of transportation to the worksite did not transform the commute time into hours worked so long as the use of the transportation was optional.  If the employees could provide their own transportation, but could also choose to use the employer-provided ride, then the employees were not subject to the employer’s control, even if the employees could not engage in personal activities such as dropping children off at school or running errands on the way to work. Key to the decision was that the HDP was voluntary and technicians who chose not to participate were paid from the time they arrived at a company garage to pick up their vehicle in order to travel to the first customer’s residence.  Because of the voluntary nature of HDP, the court held “[c]ommute time under the HDP is not compensable as ‘hours worked’ under the control test.”

The court also found that HDP participation was not compensable under the “suffer or permit” test for hours worked.  That standard is met “when an employee is engaged in certain tasks or exertion that a manager would recognize as work” and typically occurs when an employee works unauthorized overtime with the employer’s knowledge.  The technicians argued the mere transportation of equipment to the customer’s house constituted work under the “suffer or permit” standard, but the court disagreed.  The court pointed out the logical extension of the plaintiffs’ argument was that any carrying of work tools or equipment, even a briefcase, could convert commute time into hours worked.  The court distinguished a recent California Supreme Court case, Augustus v. ABM Security Services, 2 Cal.4th 257, in which the court held that employers must relieve their employees of all duties during rest breaks, on the basis that the court in that case was construing the “control” test rather than the “suffer or permit” test.

Where Do We Go From Here?

Employers in California can feel more confident that offering transportation services or vehicles to employees for commute purposes will not constitute hours worked so long as it is clear that the employer-provided transportation is optional and voluntary.  Employers should consider having a written policy to this effect.  Although the court did not rely on an acknowledgment in reaching its decision, having a written acknowledgment of the policy is recommended. In addition, records or evidence that some employees choose not to use the employer-provided transportation and a policy and procedure establishing how those employees are paid will help to bolster the voluntary nature of employer transportation or vehicles during the commute.