SBE News

GSBE Weekly Update 10/03/2018

California High Court Requires Closer Tracking of Time Worked

GSBE Golden State Builders ExchangesThe California Supreme Court ruled that Starbucks and other employers must pay workers for routine off-the-clock activities, such as setting the alarm and closing the store at the end of the day—even if the amount of time is minimal.

Under the federal “de minimis” rule, businesses can require employees to work a trivial amount of time (up to 10 minutes) each day without compensation if the time is administratively difficult to track. But this is not necessarily the case in California.

In a ­­unanimous opinion on July 26, the state high court said that the de minimis rule has not been adopted under California wage and hour statutes and regulations. And, at least in the case before the court, the rule doesn’t otherwise apply under state law.

“We hold that the relevant wage order and statutes do not permit application of the de minimis rule on the facts given to us … where the employer required the employee to work ‘off the clock’ several minutes per shift,” wrote Justice Goodwin Liu for the court.

But the ruling is limited. “We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.”

Employers in California need to be prepared for the end of the de minimis rule as a defense to wage and hour class actions, said Grant Alexander, an attorney with Alston & Bird in Los Angeles. Employers will need to determine how to compensate employees for the time that has previously been treated as off-the-clock work, either by adjusting shifts to avoid such work or by identifying and compensating those individuals who routinely open and close retail locations, he added.


AB 1804: Promotes Housing Development

AB 1804 (Berman; D-Palo Alto) expedites infill development of affordable housing by expanding the existing California Environmental Quality Act exemption for infill projects to unincorporated areas already surrounded by urbanized land uses and populations.


By expanding this categorical exemption, the bill would incentivize and streamline the development of affordable housing units in unincorporated areas surrounded by urban uses. Although the bill expands the geographic scope of the exemption, AB 1804 limits projects that may qualify to multi-family projects of at least six units at a density at least equivalent to the surrounding area, and no less than six units per acre.


CEQA serves an important goal of preventing public agencies from approving projects with potentially significant impacts if there are feasible mitigation measures that would eliminate or substantially reduce those impacts. Notwithstanding these benefits, CEQA is often used by special interest and community groups to delay, scale back, or halt projects altogether for reasons unrelated to the environment.

By revising the CEQA categorical exemption to narrowly include residential and mixed-use housing in certain unincorporated areas, AB 1804 balances the vital need for new housing with ensuring that any potential project subject to the exemption does not have a significant effect on the environment.

Adequate and affordable housing is fundamental for the well-being of communities, businesses and the economy of the state as a whole. While California continues to reel from one of the most severe housing crises the state has ever experienced, it is imperative for the Legislature to do everything within its power to help expedite the construction of new residential and mixed-use housing.


AB 2913: Promotes Fairness in Housing Construction

AB 2913 (Wood; D-Healdsburg) provides that a permit would remain valid if the work on the site authorized by that permit is begun within 3 years after its issuance, or if the work authorized on the site by the permit is suspended or abandoned for a period of up to 3 years after the time the work has begun.

The bill extends the duration of a building permit from 6 months to 12 months. Given the statewide (and national) workforce shortage, it is not uncommon for builders to have to suspend operations for a short period to find the full slate of workers needed for a specific job. This change in law would be particularly helpful in fire-ravaged areas where the workforce shortage has been further exacerbated and the need to rebuild quickly is great. With the extent of the devastation and the number of homes that need to be rebuilt, one can expect delays. AB 2913 will help make sure that delay does not result in the need for duplicative building permit applications and fees.


AB 2913 will also make the permitting process less cumbersome. State and local economic conditions may change, causing some projects to slow down. Additionally, California’s state and local building codes change every 18 months; these small changes in the building code should not force a previously approved project to have to go back to the end of the permit line and resubmit (expensive) compliance documentation and pay a new set of fees for homes that were previously approved for construction.