Dive Brief:

• Ulta has agreed to pay $1.75 million to settle four class action lawsuits alleging several violations of California's wage and hour laws (Tellez, et al. v. Ulta Salon, Cosmetics & Fragrance Inc., No. 18-cv-2480 (S.D. Cali. Feb. 10, 2020)).
• The plaintiffs said in a 2018 court filing that Ulta required employees to submit to security checks and other work tasks off the clock. Furthermore, they said Ulta did not provide non-exempt employees with timely meal or rest breaks, as required under California Law. The plaintiffs claimed unpaid overtime, unpaid minimum wages, failure to provide meal periods, failure to permit rest periods, failure to pay timely wages, failure to provide accurate wage statements and failure to indemnify for incurred business expenses.
• A federal trial judge signed off on the agreement on Feb. 10. The settlement will cover 23,767 class members. The average estimated payment rings in at $44.38, with the largest payment at $222.45.

Dive Insight:

Employers looking to avoid wage and hour claims will want to exercise caution when requiring employees to engage in mandatory unpaid work-related activities. Big Lots Stores paid $7 million late last year to end a post-shift waiting time suit under California law brought by a class of approximately 31,500 current and former employees. The plaintiffs made various claims, including that they were forced to undergo unpaid security checks at the end of their shifts.

The federal Fair Labor Standards Act (FLSA) generally requires that non-exempt employees be paid for all time worked, including pre-shift and post-shift job duties. The U.S. Department of Labor sometimes considers these activities work time and sometimes not.

Courts have also been dealing with issue of what is and is not compensable. A 2014 U.S. Supreme Court case concluded that only principal activities, the tasks that are an "indispensable" and "integral" part of an employee's duties, are considered compensable time. The 10th Cir. ruled earlier this month that prison officers' pre-shift and post-shift duties were compensable. The court said security screenings and pre-shift briefings, among other things, were compensable under the FLSA because the activities are "integral and indispensable parts of the principal activities" the officers are employed to perform.

Recognizable employers have had to pay millions to resolve similar wage and hour claims. PNC Bank agreed to pay $2.75 million to settle allegations from a group of former customer service workers, who said they were required to work off the clock on a regular basis. And CorePower Yoga paid $1.5 million to settle claims from yoga instructors who said they were not paid for the prep work they were required to do before teaching.

In general, small amounts of time need not be compensated. In 2017, a federal district court granted summary judgment to Converse. While the plaintiffs claimed the bag checks sometimes took more than two minutes, Converse showed the bag inspections generally took less than 10 seconds.