By Zach Arnold | September 10, 2013
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Last October, I wrote an extensive article regarding a U-turn from the Department of Consumer Affairs regarding the way they pay athletic inspectors. When DCA went all-in in ousting George Dodd from his position as Executive Officer of the California State Athletic Commission, one of the major reasons they dumped all over him in the press is because of an exploding budget. And one of the major contributing factors to that exploding budget was the way athletic inspectors were booked for shows throughout the state.
The protocol for paying athletic inspectors: non-state employees got paid a certain wage per hour plus travel & mileage expenses. Full-time state employees working as inspectors got time-and-a-half for wages. According to California’s Labor Code, athletic inspectors for the AC are considered permanent intermittent state employees.
After ousting Dodd from his position as E.O., the Department of Consumer Affairs decided to get a bogus legal opinion from CalHR claiming that DCA no longer needed to pay time-and-a-half to full-time state employees and that it was no longer necessary to pay athletic inspectors for travel/mileage expenses. On top of that, DCA ordered inspectors to sign documents stating that they agreed to this new policy or else they weren’t going to work. When DCA attempted to implement this scheme, I tore apart the legality of it by actually citing state legal opinions & case law.
One of the weasel tricks used by Consumer Affairs and their state brethren in going after the athletic inspectors was to hide behind the FLSA (Fair Labor Standards Act), which is federal law. Unlike most federal laws where they trump state law in court, the FLSA was meant as a floor and not a ceiling for labor rights. If a state, such as California, has more generous labor laws protecting workers then those state laws trump federal law in court. The higher standard prevails.
So, what’s changed?
After receiving a complaint, the federal Department of Labor did an investigation into DCA’s policies regarding compensating athletic inspectors. The DOL investigation focused on FLSA and not California state labor code/case law. This is important to stress. The DOL conducted an audit and DCA, in return, sent out a memo to athletic inspectors on Monday claiming that what DCA & CalHR did in regarding to stiffing athletic inspectors on travel was entirely legal.
What the memo sent out to athletic inspectors didn’t include is just as important as what it stated. First, the actual DOL audit was not included in the memo to inspectors. Second, the memo was written by a personnel stooge from Consumer Affairs, not a lawyer from DCA’s legal office.
The analyst who wrote the memo on Monday, Jeff Sears, was the same person who admitted last February that the Department of Consumer Affairs was still “researching the legal basis” for trying to confiscate back pay to athletic inspectors who were paid time-and-a-half wages up to three years ago. Once his admission went public on our web site, DCA immediately backed off from their letters of confiscation. It was smoke and mirrors.
Seven months later, Sears is going after the athletic inspectors again on behalf of Consumer Affairs. This time, he’s the hatchet man for explaining why DCA won’t pay travel expenses to athletic inspectors any longer.
Putting your words in writing
In an effort to illustrate (and humiliate) Jeff Sears, we have a collection of memos he and others have written over the years regarding payment policy to athletic inspectors. The California Labor Code regarding athletic inspectors hasn’t changed in the last six years. What’s changed is DCA’s pathetic attempt to wiggle out of following standard operating procedure by coming up with new legal interpretations that are not based on case law or actual changes in the law.
Exhibit A – Jeff Sears memo from April 24th, 2007
Claim: All athletic inspectors can get paid their work wages plus travel & mileage compension.
CALIFORNIA DEPARTMENT OF CONSUMER AFFAIRS
To: California State Athletic Commission staff
From: Jeffrey Sears, Classification & Pay Manager, Department of Consumer Affairs, Office of Human Resources
Subject: Salary and Mileage Compensation for Athletic Inspectors’ Travel
At the request of Commission management, the DCA Office of Human Resources and the Accounting Office have prepared the attached document, “Compensation and Mileage Guidelines for Athletic Inspectors.”
This document was developed to explain the compensation for both the salary and mileage to be paid to Athletic Inspectors in the performance of their required duties of attending events on behalf of the Commission.
We recognize that some of these guidelines may not be what you are used to administering; however, these are the compensation rules DPA has adopted for use in assignments where there is no fixed work location.
Please refer any questions you may have regarding the implementation of these guidelines to Susan Lancara, Assistant Executive Officer or Bill Douglas, Staff Services Analyst at 916-263-2195.
cc: Debbie Sullivan, Debbie Baumbach, Ginger Eisenbeisz
COMPENSATION and MILEAGE GUIDELINES FOR ATHLETIC INSPECTORS
GUIDELINES: Travel to/from a CSAC Event
State and Federal compensation rules for work-related travel are determined by whether an employee has a headquarters “office” location or whether the employee’s home is designated as their HQ.
Per the Department of Personnel Administration (DPA), since Athletic Inspectors do not go to work at a central “office” location or have a regularly scheduled work site, the employees are designated as having their “home as headquarters.”
On all “work days” (day in which an Inspector is scheduled to work an authorized CSAC event), the Inspector may claim all travel time and mileage for the entire round trip, regardless of the mileage, plus the actual time worked at the event.
EXAMPLE: If an Inspector spends 6 hours traveling to/from an event on a Saturday (300 miles round trip), s/he would be paid for all travel time (and mileage) plus the time spent working the event (5 hours). In this example, this would equal (11) total hours of compensation for the event.
NOTE: If an employee leaves home early to avoid traffic and gets to an event two hours before work is to commence, s/he would not be compensated for the two hours spent waiting to begin work.
For each event worked in a month:
1. Time reported on the automated HRIS system and employee timesheets should include:
Total hours (hours of travel plus hours of work)
2. Travel Expense Claims (TEC, Std. 262) should indicate:
HQ address should be the same as employee home address
Round trip mileage from Inspector’s home address (as determined by Mapquest or Yahoo)
Per diem expenses (food, lodging, etc.) in accordance with State travel rules.
Inspectors: Please direct questions on this information to the appropriate California State Athletic Commission (CSAC) headquarters staff person.
CSAC staff: Please direct questions to the appropriate DCA Accounting Office or Human Resources staff.
Exhibit B – March 2010 memo on time-and-a-half wages
You can read the memo here from Casey Tichy, Labor Relations Counsel, to then-DCA lawyer James Maynard. The answer? All full-time state employees are entitled to time-and-a-half wages when they are working as permanent intermittent state employees in their role as athletic inspectors.
Exhibit C – September 2013 Jeff Sears memo saying no more travel compensation
Six years after stating the obvious, which is that athletic inspectors are eligible for travel compensation, this dog-and-pony memo is released.
Date: September 9th, 2013
To: All athletic inspectors
From: Jeffrey Sears, Personnel Officer, Office of Human Resources (DCA)
Subject: CSAC Athletic Inspector Overtime – DOL Audit Results
The federal Department of Labor (DOL), Wages and Hours Division has completed an audit of overtime payments made to Athletic Inspectors (Inspectors) of the California State Athletic Commission (CSAC). The audit is a result of Inspector complaints arising from the October 2012 change to overtime payment practices at CSC spurred by a legal opinion DCA received from the Department of Human Resources (CalHR)>
At issue was the payment of premium overtime (1.5 pay) to Inspectors who also hold full time employment in other state positions. The DOL audit concluded that one of the two factors for exemption from premium overtime payment under the federal Fair Labor Standards Act (FLSA) – that the work is “occasional and sporadic” was met. in order for occasional and sporadic employment to be exempt from the overtime payment requirement, however, a second FLSA factor must be met – that the work is in a “different capacity.” The DOL concluded that four CSAC Inspectors who are also employed by the state in “the same general occupation category” of conducting inspections, shall receive overtime payments for Athletic Inspector work performed between October 2012 and the present.
In addition, as part of the audit, the DOL investigator affirmed the CSAC was correctly interpreting the FLSA by not compensating Inspectors for “normal commute to and from the workplace,” except in certain specific situations. For CSAC Inspector work, the workday of Lead Inspectors (Event Leads) begins at home when the Lead is required to perform work prior to leaving his or her home for an event. At CSAC, this specific situation is the only compensable travel time, in accordance with the Continuous Workday Doctrine, as CSAC has directed post-even work to be performed at the event site or the next day. This was previously correctly communicated to Inspectors in the October 2, 2012, memo from prior Executive Officer Kathy (sic) Burns.
In the future, CSAC will follow these DOL directives in the payment of overtime to Athletic Inspectors.
The state’s sleight of hand
The 2007 memo correctly asserts the following — since athletic inspectors go to shows from home and there is no fixed location for a work office, home is headquarters. And when home is your workplace/headquarters, therefore any travel to and from shows for travel means you can get paid to cover the costs.
What DCA is pulling with the 2013 memo is the following stunt — only “lead inspectors” are allowed to call home headquarters because they do paperwork preparation at home before traveling to events. Therefore, only leads can get travel compension while other athletic inspectors cannot. There is no change in the law, either on the state or federal level. The only change is DCA twisting their previous legal interpretations on the law. And rather than cite state labor code or case law, they are continuing to hide behind FLSA (federal) opinions on the matter when state labor law trumps federal labor law for higher standards.
An additional problem spawned by such activity at home is that once an employee does any work during a workday, activities that come after — such as commuting — that might otherwise not normally be considered “work” may become compensable. This is because once work has commenced on a given workday, under the FLSA’s “continuous workday” doctrine, time that might otherwise be non-compensable (such as normal commuting time) can become compensable. Driving time from home to work is not compensable. But if “home” has become a “workplace,” it is treated just like any other workplace — and driving time between workplaces has always been compensable. Similarly, when employers require employees to put on a specific uniform at work, the continuous workday can commence, and all (non-break) time until that uniform is taken off can become compensable.
Since DCA has performed their U-turn last year on travel compensation against athletic inspectors, they have never once cited California labor code nor case law. If/when they get challenged in court (through the usage of the Private Attorney General Act in California’s Labor Code), I suspect the one item of case law that DCA will attempt to use for justification is the following case:
In 2009, Rutti sued private company Lojack, Inc. over the issue of travel compensation & the continuous workday doctrine given that he and other employees travel from home to go to various job sites. The Ninth Circuit Court of Appeals in 2009 ruled that Rutti and others could not be compensated for travel expenses.
The court determined that the technicians’ travel in the company van from home to the first job and to home after the last job of the day was normal commute time and was not compensable. Under the 1996 Employee Commuting Flexibility Act (ECFA) amendments to the federal Portal-to-Portal Act, an employee’s use of an employer’s vehicle for commuting is not compensable if the travel is within the normal commuting area for the employer’s business and the use of the company vehicle is subject to an agreement between the employer and the employee. The court found that the “agreement” required by ECFA may be a condition of the employee’s employment. Thus, the technicians’ claim that they should be compensated for travel time at the beginning and the end of the day in the company van was rejected.
The court reached the same conclusion applying California law. Unlike the facts in Morillion v. Royal Packing Co., 22 Cal. 4th 575 (2000), which found travel time on a mandated company bus to be compensable because the employees were “subject to the control of the employer” while traveling, the facts in Rutti show that the Lojack technicians were not required to meet at a specific departure point or at a certain time. Rather, the technicians were free to determine when they left, the routes they took, and which assignments to visit first. Thus, they were not subject to the “control of the employer,” and the travel time was not compensable under California law.
After the Ninth Circuit Court came up with their initial ruling, an intriguing development happened — the three judges on the Ninth Circuit Court of Appeals couldn’t agree with each other on the case and issued a second opinion.
In Rutti II, two of the judges cited case law and determined that Rutti and other employees could be compensated for travel & mileage to the first work site of the day. As the item at Davis Wright Tremaine LLP explains, the case law cited the most in these kinds of disputes is Morillion v. Royal Packing Company, 22 Cal. 4th 575, 586 (2000). As you can read in this article by lawyer Bryan Schwartz, the issues raised from California Labor Law regarding compensation for travel are not clear cut. Therefore, judges in the state tend to side with those seeking travel compensation because California Labor Law is of a higher standard than FLSA federal law.
The DWT LLP summary of Rutti II from the Ninth Circuit Court of Appeals states the following:
One: State law, if more favorable to the employee, can override federal law. Even if something is permitted, or is not compensable, under the Fair Labor Standards Act or some other federal wage-and-hour law, the result may be different under state law—and often is in California.
What puts DCA in a precarious position here is that their legal team would have to argue that since they don’t provide athletic inspectors with a state company car that therefore they shouldn’t have to pay for travel compensation. Given the distances that many athletic inspectors in the state have to travel to attend shows, I find it difficult to believe that a judge will be sympathetic to the state’s plea of stingy behavior.
Making DCA’s case even tougher is that they are the state of California. Rutti vs. Lojack Inc. was about an employee versus a private employer in California. The protections state employees have over private employees is greater. Since the state’s labor law classifies athletic inspectors as permanent intermittent state employees, it means that they are state employees when they are on the clock. Furthermore, a 2002 California state legal opinion on this topic sided with paying compensation for travel time.
Why DCA’s U-turn will backfire
On a legal basis, DCA is setting themselves up for a court challenge from the inspectors. This is a prime situation for a request of a writ of mandate to fix the situation.
The situation was created entirely by DCA. They established years ago that inspectors could get time-and-a-half and travel/mileage compensation based on state labor law in 2007. When money is tight, now the state agencies want to hide the weaker FLSA federal law in order to not follow state labor code in order to pay the inspectors what they are entitled to.
What we have here with DCA strong-arming athletic inspectors is a classic case of an agency being penny-wise and pound-foolish. In an attempt to nickel-and-dime those working for the commission, they’ve stirred up a hornet’s nest. Morale sucks right now. The majority of athletic inspectors and officials in California right now are extremely unhappy. They’re unhappy about the pay situation and they’re unhappy with what they see as a disorganized, last-minute system of chaotic scheduling of assignments to work shows.
The end result is that the veteran athletic inspectors who can do the job and know what they are doing are completely demoralized & discouraged. They’ll end fading away while getting replaced by fresh-faced newcomers who, more often than not, are disorganized and simply not equipped to do the job properly.
The situation in California requires sound logic and good management. Twisting the enforcement of laws by coming up with different legal opinions rather than actually making changes to the law is not the right way to go about making the appropriate changes needed in the state. Sacramento continues to shoot itself in the foot.
Exit question (from one official): “If we get paid mileage from our homes to the venue, how are we not on work time?”