Ski industry employee compensation issues

STATE OF CALIFORNIA GRAY DAVIS, Governor
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
LEGAL SECTION
455 Golden Gate Avenue, 9th Floor
San Francisco, CA 94102
(415) 703-4863

MILES E. LOCKER, Chief Counsel

November 3, 2000

Bob Roberts, Executive Director
California Ski Industry Association
74 New Montgomery Street, Suite 750
San Francisco, CA 94105

Re: Ski Industry Employee Compensation Issues

Dear Mr. Roberts:

I have been asked by Labor Commissioner Art Lujan to respond to the questions raised in your
letter of September 27, 2000, seeking advice from the Division of Labor Standards Enforcement
("DLSE") on various ski industry employee compensation issues.

First, you ask whether the ski industry can use the services of "volunteers" such as persons
"acting in the capacity of safety information specialists" or "ambassadors/hosts" who, you
state "assist in the operations of the ski patrol." As you know, Labor Code section 3352
provides that "any person performing voluntary service as a ski patrolman who receives no
compensation for those services other than meals or lodging or the use of ski tow or ski lift
facilities" is excluded from the definition of "employee" for workers' compensation purposes.
National Ski Patrol members may fall within this exclusion; however "safety information
specialists" and "ambassadors/hosts" who do not perform services as a "ski patrolman" would
not. You also inquire whether "parents assisting in youth racing programs" would be similarly
exempt. Labor Code section 3352(j) exempts from the definition of "employee" for workers'
compensation purposes:

"any person, other than a regular employee, performing officiating services relating to
amateur sporting events sponsored by any public agency or private nonprofit organization, who
receives no remuneration for those services other than a stipend for each day of service no
greater than the amount established by the Department of Personnel Administration as a per
diem expense for employees or officers of the state."

You do not indicate whether these "youth racing programs" are sponsored by a public agency or
private nonprofit organization. If instead these programs are sponsored by private for-profit
businesses, the exemption would not apply.

Of course, the issue of whether a person providing service is a 'volunteer' or an "employee"
also has wage and hour implications. Each of the Industrial Welfare Commission ("IWC") orders,
including Order 10-2000, which governs the ski industry, defines "employ" to mean "to engage,
suffer, or permit to work." Nonetheless, DLSE will not treat a bona fide volunteer as an
employee for wage and hour purposes. In general, a person "volunteering" his or her services
to a for-profit business for the purpose of gaining experience in a particular occupation or
for the purpose of deriving some other benefit from the work experience (e.g., the use of the
employer's facilities) will be treated as an employee entitled to payment of no less than the
minimum wage and applicable overtime for all hours worked. In contrast, a person who provides
his or her services to a public agency, religious or humanitarian organization, or similar
nonprofit corporation, without any expectation of pay, but rather, for public service,
religious, or humanitarian objectives, will be treated as a bona fide volunteer. The nature of
the entity to whom the services are provided, and the intent of the parties, is controlling.

Secondly, you ask whether DLSE field enforcement staff will require ski industry employers to
provide required equipment, such as skis, bindings, boots and poles, to employees earning less
than twice the minimum wage, and if so, whether the employees could be required to return this
equipment to the rental shop at the end of the employee's work day. IWC Order 10-2000, section
9(B) provides that "when tools and equipment are required by their employer or are necessary to
the performance of the job, such tools and equipment shall be provided and maintained by the
employer, except that an employee whose wages are at least two times the minimum wage provided
herein may be required to provide and maintain hand tools and equipment customarily required by
the trade or craft." The term "hand tools and equipment" refers to small tools and equipment
that are carried in a worker's hands while the worker is performing his or her work, such as a
screwdriver, pruning shears, etc. Neither skis, bindings, boots nor poles would fall into that
category. Thus, the employer's obligation to provide employees with these items, if such items
are required by the employer or necessary to perform the job, would extend to all employees,
not just those earning less than twice the minimum wage.1

Of course, as you correctly state in your letter, the brand or quality of the equipment
provided to the employees can be determined by the employer in its discretion, so long as the
equipment is usable for its intended purpose. You also inquired as

1 Separate and apart from these IWC provisions, Labor Code §2802 requires every employer to
indemnify its employees "for all that the employee necessarily expends or loses in direct
consequence of the discharge of his duties." Under this statute, an employee is entitled to
reimbursement for amounts spent purchasing equipment that is required in order to perform his
or her job.

to whether the equipment that must be provided by the employer will be limited to skis,
bindings, boots and poles. That would depend on whether the employer requires the employees to
use any other equipment in performing their jobs. If this is the only equipment that is
required or necessary for the performance of the job, then no other equipment need be provided.
However, we should point out that section 9(A) of the IWC Order provides that "when uniforms
are required to be worn by the employee as a condition of employment, such uniforms shall be
provided and maintained by their employer. The term 'uniform' includes wearing apparel and
accessories of distinctive design or color." Required items of clothing with a distinctive logo
which bear the name of the employer would constitute a "uniform" for the purpose of this
section, as would almost all required colors or designs.

Thirdly, you ask for DLSE's interpretation of the special provisions for the ski industry that
were adopted by the IWC on June 30, 2000 that are now found at section 3(l) of Wage Order 10-
2000. Specifically, you ask whether ski industry employers are subject to double time for all
hours worked by an employee in excess of 12 hours in one workday. Section 3(l) of the Wage
Order provides:

"No employer who operates a ski establishment shall be in violation of this Order by
instituting a regularly scheduled workweek of not more than 48 hours during any month of the
year when Alpine or Nordic skiing activities, including snowmaking and grooming activities, are
actually being conducted by the ski establishment; provided, however, that any employee shall
be compensated at a rate of not less than one and one-half times the employee's regular rate of
pay for any hours worked in excess of 10 hours in a day or 48 hours in a workweek."

IWC Order 10-2000 went into effect on October 1, 2000. Prior to that, Labor Code §1182.2
provided ski industry establishments with a workweek of up to 56 hours without payment of
overtime during months of Nordic or Alpine ski activities. Any work performed in excess of 56
hours in a workweek required payment of time and a half the employee's regular rate of
compensation, with no provision for daily overtime. As a result of AB 60, section 1182.2 was
repealed on July 1, 2000, however, the IWC's Interim Wage Order extended this 56 hour workweek
until the effective date of Order 10-2000. Under the new wage order, the 56 hour workweek
without overtime has been reduced to 48 hours, and employers must pay daily overtime at the
rate of time and a half for all work in excess of 10 hours in a day. Section 3(l) does not
provide for double time after 12 hours, and the testimony at the IWC's June 30, 2000 meeting
leaves no doubt that the Commissioners understood that under the proposal they adopted by a 3
to 2 vote, there would be no double time for work performed during months of Alpine or Nordic
ski activities. (Transcript of 6/30/00 IWC Meeting, p. 55-57.)

Fourthly, you ask whether part-time ski industry employees, whose hours of work do not exceed
10 in a day or 48 in a week, will be entitled to seventh day premium pay when they work seven
consecutive days in a workweek. Labor Code §510(a) provides that "the first eight hours worked
on the seventh day of work in any one workweek shall be compensated at the rate of no less than
one and one-half times the regular rate of pay for an employee . . . [and] any work in excess
of eight hours on the seventh day of the workweek shall be compensated at no less than twice
the regular rate of pay of an employee." Under Labor Code §515(b)(1), until January 1, 2005,
the IWC may establish additional exemptions to hours of work requirements. In adopting Wage
Order 10-2000, the IWC did not create any exemption from these seventh day premium pay
provisions for ski industry employees. Section 3(l) of the wage order does not provide for any
alternative to the statutory requirement for seventh day premium pay. Moreover, a review of the
transcript of the IWC proceedings relative to the ski industry at its meeting of June 30, 2000
reveals that the subject of seventh day premium pay was never discussed, and thus, there is no
evidence that the IWC had any intent to exempt the ski industry from the seventh day premium
requirements set out at Labor Code §510(a). Consequently, part time ski industry employees
(like full-time ski industry employees) would be entitled to seventh day premium pay at the
rate provided in Labor Code §510(a), regardless of whether such employees work fewer than 48
hours in a week and no more than 10 hours in a day.

Fifthly, you ask whether ski patrol and repair technicians who are required to keep their
radios on during lunch and rest breaks (and who, presumably, would be required to respond to
any emergency calls during those breaks) qualify for paid "on duty" breaks. Also, you ask
whether "snow groomers," who often work at a great distance from resort base facilities,
qualify for such "on duty" breaks. In answering this question, it is important to distinguish
between rest periods and meal periods. Section 12 of IWC Order 10-2000 requires every employer
to "authorize and permit all employees to take rest periods . . . at the rate of ten minutes net
rest time per four hours or major fraction thereof. . . . Authorized rest period time shall be
counted as hours worked for which there shall be no deduction from wages." Meal periods are
required pursuant to Labor Code §512 and section 11 of IWC Order 10-2000. The wage order
provides:

"Unless the employee is relieved of all duty during a 30 minute meal period, the meal period
shall be considered an 'on duty' meal period and counted as time worked. An on-duty meal period
shall be permitted only when the nature of the work prevents an employee from being relieved of
all duty and when by written agreement between the parties an on-the-job meal period is agreed
to. The written agreement shall state that the employee may, in writing, revoke the agreement
at any time."

Employees who are required to listen to their radios and promptly respond to emergencies
during a meal break are considered to be on duty and any such time is considered hours worked,
as during that time the employees are subject to the employer's control. See Madera Police
Officers Ass'n v. County of Madera (1984) 36 Cal.3d 403. Moreover, employees who are restricted
to their employers' property during meal periods are likewise subject to employer control and
are entitled to be paid for all such time. Bono Enterprises v. Labor Commissioner (1995) 32
Cal.App.4th 968. Thus, we would conclude, based on the facts you have presented, that ski
patrol, repair technicians and "snow groomers" would be entitled to paid meal periods.

Lastly, you asked whether these wage and hour requirements will be applied retroactively. The
answer to that depends on which legal requirements are being enforced. Certain provisions
discussed above -- including restrictions on the use of unpaid "volunteers," the duty to
provide employees with required equipment and uniforms, and the duty to pay employees for an
on-duty meal period -- are not new, and have been the law for years, if not decades. Any
employee complaints concerning these matters would trigger liability for the full period of
time covered by the statute of limitations, which in the case of an obligation founded upon
statute would run back three years from the date a claim is filed. See Cuadra v. Millan (1998)
17 Cal.4th 855. Other provisions, such as the requirement to pay overtime for all hours worked
in excess of 10 in a day or 48 in a week, did not exist prior to the effective date of IWC Order
10-2000, and thus, liability for such a claim could not extend back prior to October 1, 2000.

Thank you for giving us this opportunity to respond to your questions, and for your interest in
complying with California wage and hour law.

Sincerely,

Miles E. Locker
Chief Counsel

cc: Art Lujan, State Labor Commissioner
Tom Grogan, Chief Deputy Labor Commissioner
Greg Rupp, Assistant Labor Commissioner
Roger Miller, Assistant Labor Commissioner
Nance Steffen, Assistant Labor Commissioner
All DLSE Attorneys
Andrew Baron, IWC Executive Officer