In Martinho v. Amazon, Inc., a federal court analyzed which of Amazon’s new hire activities were compensable under California law, ultimately finding that activities designed to verify employment eligibility were not compensable, while internal company onboarding procedures were.
Background
Plaintiff Michelle Martinho applied for an hourly position at an Amazon fulfillment center in Tracy, CA. Martinho received a conditional job offer which provided that she complete Amazon’s standard new hire activities: submitting I-9 paperwork, passing a background check and drug test, taking a badge photo, and watching a welcome presentation. Candidates were allowed to to complete certain new hire activities either in-person or online.
Amazon did not pay candidates for completing new hire activities because the job offer was conditional on completing the tasks. Martinho filed a lawsuit seeking wages for time spent completing new hire activities.
Activities to Assess Employment Eligibility Are Not Compensable
The Court analyzed which pre-employment activities were compensable under California law. It found that the time spent on a drug test was not compensable because it is an activity to secure a position, like an interview or preemployment exam, not a requirement for those already employed. The fact that Amazon clearly communicated the conditional nature of the job offer prior to completing the drug test also supported the Court’s conclusion.
For the same reasons, the Court also found that time spent filling out I-9 paperwork and completing a background check also qualified as employment eligibility tasks and were therefore not compensable.
Company Onboarding Activities Are Compensable
On the other hand, the time Martinho spent taking a company badge photo and watching Amazon’s welcome presentation was compensable. The Court explained that, unlike a drug test, these activities “do[] nothing to assess an employee’s qualifications or eligibility to work.” Rather, these activities are primarily associated with those performed by employees. For example, the company badge is only provided to employees and grants access to Amazon’s distribution centers. Similarly, the welcome presentation is intended to save time on an employee’s first day of work by educating new hires on what they can expect at an Amazon facility. The Court concluded that Martinho was acting as an employee at the time she took the badge photo and watched the welcome presentation because there was “no question” that Amazon controlled the manner and means of completing these activities.
Class Certification Granted
Martinho sought to certify a class of Amazon employees who attended an in-person or hybrid new hire event. Amazon argued that the claims were not fit for class treatment because there was wide variability in the amount of time it took to complete new hire tasks and that some people completed the tasks virtually and others were in person. The Court determined that Amazon was capable of identifying the amount of time each candidate spent on new hire activities because it had an applicant tracking system that recorded attendance and task completion at in-person and hybrid new hire events. The Court therefore approved a class of employees who attended an in-person or hybrid new hire event and who completed either the badge photo or welcome presentation activities.
Key Takeaways
Martinho provides employers with guidance about what types of pre-work activities are compensable for new employees and the potential risk from related class actions. To avoid this risk, employers should clearly differentiate between new hire tasks designed to verify employment eligibility (drug testing, background checks, I-9 paperwork) and those that are purely associated with company onboarding procedures and that must be compensated, such as internal trainings, access card set up, and any other activity that is primarily performed by an employee. Martinho also emphasizes the importance of communicating the conditional nature of a candidate’s job offer prior to engaging in new hire activities. Employers with pre-employment screening procedures should explicitly state that the job offer is contingent on completing those activities before a candidate begins the new hire process.
