Courts draw lines on off-the-clock pay for restaurant staff


Recent court decisions have clarified an often-confusing issue for restaurateurs: When are employees entitled to pay for time spent at the workplace doing activities outside of their jobs?

In a case involving Starbucks, the Supreme Court of California decided that even quick tasks such as turning on an alarm system after clocking out or walking a fellow employee to her car after both parties’ shifts have ended are work functions for which the employee should be paid. 

But in a separate decision, the United States Court of Appeals for the 9th Circuit ruled that Taco Bell isn’t required to compensate employees for the time they spend eating discounted lunches on-premise. To buy the tacos and burritos at a deep discount, employees have to eat the food at the restaurant, a measure intended to prevent staffers from purchasing food at the employee rate and then giving it to family and friends.

The federal court affirmed a lower court’s decision that Taco Bell needn’t pay employees for their half-hour meal break because of the requirement that discounted fare be consumed on-site. The judges ruled that eating in the restaurants is an option, not a requirement imposed by the chain. Employees can leave the premises if they choose or buy Taco Bell food at full price and eat it wherever they’d like.

Although the ruling was specific to Taco Bell, many restaurants provide employees with free or discounted food. It’s unclear how many require that the fare be consumed on-premise, but the practice has evolved in part to keep workers on the site so they resume their shifts on time.

The Starbucks decision has wider implications. The California court ruled that even a few minutes spent off the clock but on work-related endeavors should be factored into employees’ wages, a reversal of what’s known as the de minimis principle—an exemption for activities so fleeting they don’t merit being noted and recorded.

Federal laws incorporate the principle, but California’s wage and hour regulations do not. For that reason, the court ruled that employers in the state should compensate workers for minor tasks performed off the clock.

In the case, those activities included turning on the alarm, an activity that took a minute, and occasionally having to unlock the doors after closing to let in an employee who had left something inside. Other actions included bringing in a piece of patio equipment that had been left outside, waiting with a staffer until his or her ride arrived or walking a co-worker to his or her car.

The lead plaintiff in the class-action suit, Douglas Troester, had spent an estimated four to 10 minutes a day on activities along those lines, or a total of 12 hours and 50 minutes for the 17 months he worked as a supervisor for Starbucks. Under the minimum wage in place at the time, Troester was entitled to $102.67.

“That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” the California Supreme Court noted.

“An employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine,” the court concluded.

Yet it left itself an out: “We leave open whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.”

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Older brands try new tricks in their quest to stay relevant

Reality Check: A number of mature restaurant chains are out to prove that age is just a number.


At Papa Johns, delivery shifts from its own apps to aggregators

The Bottom Line: The pizza delivery chain’s business with companies like Uber Eats and DoorDash is thriving while its own delivery is slowing. But this isn’t the beginning of the end of self-delivery, CEO Rob Lynch says.


How the shift to counter service has changed Steak n Shake's profitability

The Bottom Line: Sardar Biglari, chairman of the chain’s owner Biglari Holdings, details how the addition of kiosks and counter service has transformed restaurants.


More from our partners