New hires need not be paid for time related to drug screening, according to court

Excerpted from an HR Dive Blog by Laurel Kalser

California law doesn’t require employers to reimburse new hires for their travel expenses or for their time related to a pre-employment drug test, according to a ruling by the 9th U.S. Circuit Court of Appeals in Johnson v. WinCo Foods, LLC, No. 21-55501.

WinCo Foods operates a chain of supermarkets across the western U.S., including California. After the company extends a contingent job offer to new hires, it requires them to undergo a mandatory drug test. If a new hire consents to the offer, WinCo instructs them to report to a drug testing location at a specific time and date. The company pays the facility’s fees but doesn’t compensate new hires for the travel expenses or for their time undergoing the drug test.

A California employee filed a class-action suit against WinCo under state law to get reimbursed for travel expenses and time spent taking the drug test. The 9th Circuit upheld judgment for WinCo. The class members weren’t entitled to payment because they weren’t “employees” at the time of the tests, the panel said. Under California law, an employment relationship exists if a company controls how a person performs the job. The class members were applying for a job when they took the drug tests, not performing one, the 9th Circuit explained. Although WinCo exercised control over the drug testing procedure, it was merely doing so with regard to the job application process and not over the performance of a job.

Dive Insight
Pre-employment drug tests are used to screen prospective employees for illegal drug use or abuse of prescription medication. Employers typically extend conditional job offers to new hires contingent on them passing the drug test. Employers might also require current employees to be tested for drug or alcohol use following a work-related accident or pursuant to federal regulations governing their industry.

Under the Fair Labor Standards Act (FLSA), employers must pay employees for all hours worked. The FLSA doesn’t expressly mention whether this includes drug and alcohol testing, but the U.S. Department of Labor regulations offer some guidance. The regulations state that attendance at meetings, training programs and similar activities need not be counted as working time if four criteria are met: attendance is outside regular working hours; attendance is voluntary; the activity isn’t directly related to the job; and the employee doesn’t perform any productive work while attending the activity.

If a drug test is mandated by an employer and it’s not voluntary, the FLSA requires the employer to compensate employees for their time spent taking the test, Cullan E. Jones, attorney with Ford Harrison in Washington, D.C., told HR Dive. “When an employer imposes drug testing requirements on employees, the employees must be compensated for the time spent traveling to and from the tests, waiting for and undergoing these tests, or meeting the requirements of the test,” Jones said.

The FLSA only applies to “employees,” Jones added. It doesn’t apply to applicants, volunteers and independent contractors, and the “control test” the 9th Circuit used in the WinCo case isn’t relevant to FLSA pre-employment activities, he explained.

The WinCo plaintiffs argued they became employees and a contract was formed when they accepted WinCo’s job offer before they took the drug test. The 9th Circuit disagreed. WinCo went to great lengths to make sure they understood the offer was conditional, and the plaintiffs had to have known the employment offer they were accepting was contingent on a successful drug test.

“Clearly communicating that offers of employment are conditioned on passing a pre-employment drug test or pre-employment background check can shield employers from liability, as well as potential claims that the employer violated the Fair Credit Reporting Act for failing to provide sufficient pre-adverse action notice,” Jones said.

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