Keeping an employee at zero-hours

Imagine your business hits a slow patch, and your hourly employee, let’s call them Alex, is left with a schedule emptier than a ghost town saloon. You’re scratching your head, wondering, “Can you keep an employee at zero-hours?without paying a cent?” Nobody likes firing someone, and maybe business picks up? Because we’re diving the wild world of grey area U.S. labor laws I always take a nod to California’s notoriously strict regulations—the strictest sheriff in the labor law West. Let’s explore whether you can keep Alex at zero hours without pay or if switching them to a contractor role is a smarter move than a chess grandmaster’s opening gambit.

The Zero-Hour Hustle: Is It Legal Anywhere?

Across the U.S., labor laws vary like accents at a cross-country road trip diner, but the core principle is simple: if Alex isn’t working, you generally don’t owe them a dime. Here’s the lowdown:

• No Work, No Pay : Keeping in an employee at zero-hours in most states, under the federal Fair Labor Standards Act (FLSA), only require payment for hours worked. If Alex’s schedule is as barren as a desert, you’re not legally obligated to toss them a paycheck. It’s the kind of math that makes your accountant do a happy dance.
• Temporary Time-Outs: Whether it’s a seasonal slump or a supply chain snafu, most states allow employers to pause operations without paying non-exempt employees for missed work. Scheduling Alex for zero hours during a lull is usually as legal as binge-watching your favorite show.
• At-Will Freedom: Most states operate under “at-will” employment, meaning you can cut Alex’s hours to zero or show them the door without cause, unless a contract or union agreement says otherwise.

But before you pop the champagne, let’s talk about California—because your state might be up there in protecting their employees like California. California sets a high bar for what’s allowed.

California’s Strict Standards: The Gold Standard

California’s labor laws are the strictest in the U.S., and they throw a few curveballs into the zero-hour game. Here’s what the Golden State demands:

• Reporting Time Pay: If Alex shows up for work (or is required to check in) and gets sent home with less than half their scheduled hours, California mandates “reporting time pay”—at least two hours but no more than four hours of wages at their regular rate. So, if Alex is “on call” for zero hours but has to check a schedule, you might owe them anyway. Sneaky, right?
• Split Shift Premiums: If Alex works two shifts in a day with a gap of more than an hour, California requires an extra hour of pay. If you aren’t in California, this is something worth asking your HR Rep about.
• Predictable Scheduling: Some California cities (e.g., San Francisco, Los Angeles) have ordinances requiring advance notice of schedules. Drastically cutting Alex’s hours to zero without notice could trigger penalties or owed wages in these locales. So please, whatever state you are in, make sure you investigate the city ordinances where your employee is doing their business.
• Unemployment Triggers: California’s Employment Development Department (EDD) considers zero hours “partial unemployment.” Alex could file for benefits, potentially hiking your unemployment insurance rates faster than a Silicon Valley startup’s valuation.

Other states may not be as stringent, but California’s rules are a wake-up call. Even in less strict states like Texas or Florida, keeping Alex at zero hours isn’t a free lunch.

The Fine Print: Why Zero Hours Can Bite You

Keeping Alex on the payroll with no hours is like keeping a racecar in the garage—legal, but it comes with maintenance costs. Here’s what could trip you up, no matter your state:

• Unemployment Claims: Alex might file for unemployment if their hours drop to zero, claiming a lack of work. Most states allow this, and it could nudge your unemployment insurance taxes higher than a skyscraper penthouse.
• Constructive Discharge Drama: Slashing hours to zero to “encourage” Alex to quit could be seen as constructive discharge—a fancy term for “you forced them out.” Courts don’t love this, and Alex might have a legal bone to pick.
• On-Call Shenanigans: If Alex is expected to be available or perform tasks (like checking emails or schedules), that time might be compensable. California’s especially strict here, but other states follow suit under the FLSA’s “engaged to wait” rule.
• Benefits Baggage: If Alex gets health insurance or paid leave, keeping them on the payroll might mean footing the bill for benefits while they’re sipping coffee at home. That’s cash flying out the door without a return ticket.

And don’t forget paid leave laws. Many states (including California) require sick leave accrual based on hours worked. Zero hours means no new leave, but Alex’s existing balance m