Compensability of time spent obtaining a federally mandated TWIC port-security card

STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
455 Golden Gate Avenue, 9th Floor
San Francisco, California 94102
(415) 703-4863
(415) 703-4806 fax

ANGELA BRADSTREET, STATE LABOR COMMISSIONER

ROBERT R. ROGINSON
Chief Counsel

                                            November 25, 2008

W. Daniel Boone, Esq.
Patricia M. Gates, Esq.
Weinberg, Roger & Rosenfeld
1001 Marina Village Parkway, Suite 200
Alameda, California 94501
Re: Compensability of Time Spent Obtaining a Transportation Worker Identification
Credential (TWIC) Card Required Under Federal Law

Dear Mr. Boone and Ms. Gates:

  This responds to your letter dated March 4, 2008, requesting an opinion letter concerning

the compensability of time spent by workers at port facilities in obtaining a federally-issued
Transportation Worker Identification Credential (TWIC) which is a security card.

    You assert that workers at an oil refinery operated by Shell Oil Products US (Shell) who

are covered by Industrial Welfare Commission Order 1-2001 (regulating wage, hours, and
working conditions in the manufacturing industry) are being required by Shell to obtain TWIC
cards as a condition of employment. Your letter states that, currently, the employer reimburses
employees for mileage expense and the application fee but does not compensate for the time spent
completing the application process. You asked for an opinion on whether employees required to
apply for TWIC cards are entitled to be compensated for what is contended the "time spent on the
application process during which they are under the control of the employer performing mandated
activities related to their productive work."¹

    According to Shell, the facility at issue is connected to the Port of Martinez in the San

Francisco Bay area. This facility includes a dock where ocean-going vessels unload and load
crude oil and petroleum-related products. The dock facilities are immediately adjacent to, and
directly connected with, Shell's substantial refinery operations in Martinez. Shell states that the
refinery and dock facilities share a common area, operations are intertwined, and there is no
practical method of preventing any refinery employee from having access to secure areas. Shell
has submitted a security plan to the United States Coast Guard and the Coast Guard has approved
the plan. Under the terms of that security plan, all employees associated with Shell's Martinez
refinery have regular access to secure areas, and as a result, must obtain a TWIC.

¹ Following your letter, our office requested and received written input on the issues raised in your letter from counsel
for Shell and you sent a subsequent written reply. All letters were reviewed and considered in connection with your
request.

    As discussed more fully below, TWIC cards are mandated by federal law and issued by the

Transportation Security Administration (TSA). A review of the applicable federal law is
fundamentally relevant to determining both the nature of the enrollment requirement as a working
condition and whether time spent enrolling for a TWIC card constitutes "hours worked" by an
employee under the IWC Order for which an obligation of compensation rests under State law.
We conclude for the following reasons that the enrollment requirement is not a working condition
subject to the control of Shell nor is the time spent by Shell's employees in obtaining the federally
mandated credential compensable under the IWC Order.

The TWIC Program

   Following the 9/11 tragedy in 2001, Congress enacted the Maritime Transportation

Security Act of 2002 (MTSA) for the purpose of establishing a national policy and standard for
securing the nation's ports.²

    The responsible agencies are the TSA which administers the enrollment procedure and the

United States Coast Guard which administers compliance with MTSA at ports. Pursuant to MTSA,
the Secretary of the Department of Homeland Security (where both the Coast Guard and TSA
reside) promulgated regulations implementing MTSA programs and requirements. Specifically,
the Secretary is authorized to promulgate regulations to prevent unauthorized individuals from
entering an area of a facility that is designated as a secure area by the Secretary for purposes of a
security plan for the facility. To have access, an individual must hold a transportation security
card issued under the act and be authorized to be in the secure area in accordance with the facility
security plan or be accompanied by another individual who holds such card and is authorized to be
in the area in accordance with the plan. (46 U.S.C. §70105(a)). TSA regulations regarding TWIC
are at 49 CFR Parts 1570 and 1572.

    On TSA's website, TWIC is described as a required tamper-resistant biometric security

identification credential for all personnel (e.g., port facility employees, long shore workers, truck
drivers, merchant mariners, etc.) requiring unescorted access to secure areas of regulated facilities
and vessels and all mariners holding Coast Guard-issued credentials.³ The card contains the
worker's biometric (fingerprint template) allowing for a positive link between the card and the
individual. (TSA website - Frequently Asked Questions (FAQs))

² The following are among the declared Congressional findings for MTSA (Public Law 107-295, Nov. 25, 2002):
(1) There are 361 public ports in the United States that are an integral to our Nation's commerce. ... (6) Ports
often are a major locus of Federal crime, including drug trafficking, cargo theft, and smuggling of contraband
and aliens. (7) Ports are often very open and exposed and are susceptible to large scale acts of terrorism that could
cause a large loss of life or economic disruption. ... (10) Securing entry ports and other areas of port facilities and
examining or inspecting containers would increase security at United States ports. (11) Biometric identification
procedures for individuals having access to secure areas in port facilities are important tools to deter and prevent
port cargo crimes, smuggling, and terrorist actions. (12) United States ports are international boundaries that—(A)
are particularly vulnerable to breaches in security; (B) may present weaknesses in the ability of the United States
to realize its national security objectives: and (C) may serve as a vector or target for terrorist attacks aimed at the
United States. (13) It is in the best interests of the United States—…(C) to formulate requirements for physical
port security, recognizing the different character and nature of Unites States port facilities, and to require the
establishment of security programs at port facilities.; … (46 USC §70101 Note)

³ Secure area is defined as "the area on board a vessel or at a facility, over which the owner/operator has implemented
security measures for access control, as defined by a Coast Guard approved security plan. … Facilities subject to 33
CFR, chapter I, subchapter H, part 105, may with approval of the Coast Guard, designate only those portions of their
facility that are directly connected to maritime transportation or at risk of being involved in a transportation security
incident as their secure areas. (49 CFR §1570.3)

    TSA describes on its website the procedure for obtaining a TWIC card. TSA is currently

implementing the TWIC program pursuant to a time table and will designate the deadline for
compliance with the TWIC program for each of the nation's port areas.⁴ Applicants for a TWIC
card must schedule an appointment at a TWIC enrollment center (an option to save time allows
applicants to pre-enroll online at TSA's website in order to enter biographic information prior to
the appointment). At the appointment, applicants are required to bring necessary identity
documents, provide biographic information (if not pre-enrolled), complete a TWIC Disclosure and
Certification Form, pay the enrollment fee, and sit for a photograph. At its website, TSA estimates
that the enrollment process for a pre-enrolled applicant takes approximately 10 minutes and 15
minutes for those who do not pre-enroll.⁵

    Following a security threat assessment by TSA,⁶ applicants are notified when their TWIC

card is available at the enrollment center and must return to the center to pick up their TWIC card.
There may be a wait time at the center which depends on the amount of workers choosing to enroll
at any particular time.

   The TWIC program expressly requires that covered workers enroll in the program—not

that employers enroll their workers in the program. (49 CFR §§ 1572.1, 1572.3(b), 1572.9,
1572.17, and 1572.19) The cards are the property of the TSA and cannot be confiscated or taken
away from a worker by an employer. (TSA website-FAQs; 49 CFR §1572.19 (c)-(d))⁷. The holder
applies for and uses it and an employer cannot take or otherwise hold the card without the
employee's consent, regardless of who paid for it. (TSA website - FAQs)

⁴ Compliance dates are currently set for the California port areas as follows: San Diego – December 30, 2008, San
Francisco Bay Area – February 28, 2009, and Los Angeles/Long Beach – April 14, 2009.
⁵ TSA elsewhere "estimates that the total average burden per response associated with this collection [of information]
for enrollment is approximately 90 minutes." (TSA Form 2212, July 2008, TWIC Disclosure and Certification,
Paperwork Reduction Act Statement; bracketed material added)
⁶ The security threat assessment performed by TSA includes a fingerprint-based criminal history records check
(CHRC), an intelligence-related check, and a final disposition. (49 CFR §1572.21)
⁷ Information obtained during the security threat assessment may not be made available to the public, including the
individual's employer and his or her employer may only be informed of whether or not the individual has been issued
a TWIC card. (46 USC §70105(e))

    While employers direct which employees are required to enroll for a TWIC card (49 CFR

§1572.19(a)), TSA asserts that an employer cannot require their employee to enroll if their job
does not require them to have unescorted access to facilities regulated by MTSA. (FAQs; TSA
Informational Bulletin, 8/28/08; see also 49 CFR §1572.17(a)(10) [applicant must provide current
employer information if working for employer requires a TWIC]) Applicants must certify that they
need a TWIC card to perform their job, i.e, that they are currently are, or are applying to be, a port
worker who requires unescorted access to secure areas of maritime facilities or vessels. Thus, the
TWIC program limits the requirement to allow only enrollment of workers whose work requires
unescorted access to covered secure areas.

  Both your client and Shell represent that the TWIC card is issued to the individual

employee and is "portable" such that it can be used in other port facility employments.
Presumably, any transferability to another port facility where the federal criteria for requiring a
TWIC card still exists would require updating the information maintained by TSA.

The TWIC Enrollment Requirement Is Not A Working Condition Controlled By Shell

   DLSE recognizes the impact government-mandated requirements may have on the

employment relationship. Consequently, the obligations under the government-mandated
requirements must be viewed under the specific facts presented to determine its effect upon
employment obligations under applicable the IWC and Labor Code provisions.

    IWC Order 1-2001 (8 CCR §11010) regulates the wages, hours, and working conditions in

the manufacturing industry. Coverage of the IWC Orders extends only to employees and
employers as defined in the regulation. For purposes of the Wage Order, "employ" means "to
engage, suffer, or permit to work;" "employee" means "any person employed by an employer;"
and "employer" means "any person as defined in Section 18 of the Labor Code, who directly or
indirectly, or through an agent or any other person, employs or exercises control over the wages,
hours, and working conditions of any person. (IWC Order 1-2001, §2(E) and (F))

   These definitional provisions contemplate that an employer subject to the provisions of the

order must be the person (as defined in Labor Code §18) who either engages, suffers, or permits
work, or controls the wages, hours, and working conditions in the employment relationship. DLSE
recognizes that employment may be controlled by both employer-imposed conditions and also
subject to governmental requirements. It is necessary, therefore, to determine the source and
extent of the employer's role with respect to the specifically identified condition in order to
determine whether that condition is controlled by the employer as contemplated in the scope of
regulated employment under the wage order.

    As previously stated, your letter asserts that oil refinery workers are being required by

Shell to obtain a TWIC as a condition of employment. This assertion appears to overstate, as a
legal matter, Shell's role with respect to the enrollment requirement for TWIC cards. An
examination of the federal program reveals that it is not an employer-imposed requirement or
condition of employment, but a federally mandated requirement and process for controlling access
to secure areas of public ports under implementation of a national security policy.

    Regarding enrollment for TWIC cards, however, facility owners and operators are required

to notify employees of their responsibility to possess a TWIC card based upon the employee's
need to have unescorted access to secure areas of facilities. (TSA website – FAQs) According to
TSA, an employer is obligated to inform employees that they must obtain a TWIC card, how to
apply, and the deadline for application. (Id.) When operative in a particular area, unescorted
access to secure areas by an individual without a TWIC card is prohibited by federal law.⁸

    As previously stated, the federal obligation to enroll is placed upon individuals whose

work requires unescorted access to secure areas of a port facility. The need for a particular person
to enroll is based solely on the federally established criteria which mandate that any person
requiring unescorted access to secure areas of a facility must obtain a TWIC card. Also, the
security threat assessment performed by TSA for enrollment does not evaluate the individual's
qualifications for a position or the duties an employee performs for the employer. (See 49 CFR §§
1572.17, 1572.21) The TWIC program does not mandate to the employer which personnel have
access to the employer's premises. Rather, it simply requires that those workers who are required
to access secure areas have a TWIC card.⁹

    The fact that employers notify their workers who must enroll based upon the federal

criteria for TWIC cardholders does not diminish the fundamental source of that directive which is
based upon TWIC program requirements under a port security system that has general application.
Nor does the fact that an employer is the one communicating the requirement transform the federal
requirement for enrollment to an employer-imposed working condition. The apparent portability
of the TWIC card to other port facility employments underscores the general federal regulatory
aspect of the program which is not confined to a specific employer.

     As pointed out in your reply letter, an employer who is an owner or operator of a port

facility regulated under MTSA does have a role in determining the secure and restricted areas of a
facility (see, 33 CFR §105.305(a)(1)(iv)). You then maintain that such role determines or directs
which worker positions will be subject to the TWIC enrollment requirement at the particular
facility.¹⁰ However, the several levels of review and necessary adoption by the federal
government of a Facility Security Plan as well as the extensive regulation of mandatory
components for such plans necessarily and logistically depend on input and implementation by
facility owners and operators for meeting federal security objectives. The ultimate required
approval of the FSP by the federal government based upon security considerations under the
MTSA and implementing regulations effectively displaces any initial discretion-based designation
by the owner or operator. The federal adoption renders the designated secure areas security-based
determinations by the government (46 USC §70105(a)) which is made independent of the
employment relationship between an owner or operator and its employee. Once the designated
secure areas are approved by the federal agency, they must be adhered to unless subsequently
modified with the approval of the government. (33 CFR §105.415)

⁸ TWIC enrollment is also not a condition for hiring an employee. Newly hired employees who do not have a TWIC
card must comply with specific provisions for compliance with the program while enrolling. Thus, an employer can
hire an employee for immediate work and allow access to secure areas under special rules while applying for a TWIC
card. (TWIC Program: Small Entity Guide for Applicants, 9/14/07, pp. 17-18)
⁹ TSA states that TWIC enrollment also extends to contractors who are not direct employees of a facility owner or
operator as long as they meet the TWIC eligibility requirements and, at a minimum, are expecting to pursue contracts
at MTSA-regulated vessels and facilities where the owners or operators have determined a need for unescorted access
in secure areas. (TSA website–FAQs) Additionally, even if federal rules specify that an individual must have a TWIC,
owners and operators decide who may enter a secure area. Thus, having a TWIC is not a right to unescorted access.
The owner or operator must give permission to be in a secure area without an escort. (TWIC Program: Small Entity
Guide for Applicants, 9/14/07, pp. 10 & 12)

    Based upon all of the facts presented in this matter, it is clear that the TWIC enrollment

requirement is not an employer-imposed requirement. Rather, the enrollment obligation is based,
both fundamentally and pervasively, upon the federal TWIC program. Since Shell is obligated to
direct an employee to enroll for a TWIC and can only direct employees who fall within
government established criteria, Shell does not effectively control the enrollment requirement.
Accordingly, the enrollment requirement is not a working condition subject to the direct or indirect
control of the employer within the definitional language for "employer" contained in Wage Order
1, §2(F).

   Since the condition or activity (enrollment requirement) is beyond the scope of the

employment as defined and regulated in the wage order, Shell cannot be subject to its provisions
with respect to compensation based upon the status of the enrollment requirement as a condition of
employment.

Time Spent By Shell's Workers During The TWIC Enrollment Process Does Not Constitute
"Hours Worked" Under The Wage Order

   Your letter also raises the question regarding the "hours worked" requirement under Wage

Order 1 and seeks an opinion regarding the compensability for time spent enrolling for a TWIC
card. Although the preceding analysis simply determines that the enrollment requirement alone is
not a working condition subject to the control of the employer, we now address the "hours
worked" requirement for time spent by workers enrolling for a TWIC card.

  Section 4(a) of IWC Order 1-2001 requires that "[e]very employer shall pay to each

employee wages not less than [the minimum wage] for all hours worked…" Section 2(G) of the
order defines "hours worked" as "the time during which an employee is subject to the control of
the employer, and includes all the time the employee is suffered or permitted to work, whether or
not required to do so."

    The seminal case interpreting the "hours worked" language under the IWC Orders is

Morillion v. Royal Packing Company (2000) 22 Cal.4th 587. In Morillion, the Supreme Court
held that compulsory travel time spent by agricultural workers was compensable "hours worked"
where workers were required to meet at designated departure points at a certain time to ride
employer's buses to work and for return to the departure point after work. By requiring employees
to take certain transportation to a work site, the employer subjects those employees to its control
by determining when, where, and how they are to travel, and thus, such time is "hours worked"
under the definition and compensable. (Id., at 588)¹¹ In an extensive analysis, the court found that
the "suffered or permit to work" clause in the wage order definition of "hours worked" does not
limit the "subject to control" clause in the definition. (Morillion, supra, 22 Cal.4th at 582) Each
clause can be interpreted as independent factors, each of which defines whether certain time spent
is "hours worked" under the Wage Order.¹² Satisfaction under either clause renders the time
compensable.

¹⁰ The owner or operator of a facility must conduct a Facility Security Assessment (FSA) (33 CFR §105.305) and
report (33 CFR §105.305(d)). In the FSA, the facility owner or operator designates restricted areas of a facility. (33
CFR §105.305(a)(1)(iv)) The owner or operator also must prepare and submit a Facility Security Plan (FSP) (33 CFR
§105.200(b), §105.405) which is reviewed for mandatory elements and approved by the Secretary. (46 USC
§70103(c)) The FSP must be consistent with an established Maritime Transportation Security Plan prepared by the
Secretary and the applicable regional Area Maritime Transportation Security Plan prepared by the assigned Federal
Maritime Security Coordinator. (46 USC §70103(c)(3)) The FSA, FSA Report, and FSP must be protected from
unauthorized access or disclosure. (33 CFR §106.305(e))
¹¹ The court also determined in a separate analysis that the relevant portions of federal provisions in the FLSA and
Portal-to-Portal Act differed substantially from the IWC Order and related state authority, concluding that reliance
upon federal authority, and deference given by the Court of Appeal, were not persuasive. (Id., at 594) For example,
the federal regulations establish different rules for compensability of out-of-town travel during working hours and
after working hours. (See DLSE Op. Ltr. 2002.02.21)
¹² In discussing the independence of the two clauses, the Supreme Court agreed with previous opinion letters of
DLSE's interpretation of "hours worked" which contained the general statement that "Under California law it is only
necessary that the worker be subject to the 'control of the employer' in order to be entitled to compensation." (Id., at
585)

    Under the "subject to control" clause, time during which an employee is subject to an

employer's control is compensable and the employee does not have to be working during that time
to be compensated. (Morillion, supra, 22 Cal.4th at 582, citing Bono Enterprises, Inc. v. Bradshaw
(1995) 32 Cal.App.4th 968, 974-975, disapproved on other grounds in Tidewater v. Bradshaw
(1996) 14 Cal.4th 557, 573-574 and Aguilar v. Association for Retarded Citizens (1991) 234
Cal.App.3d 21, 30) These cases further establish that the employee does not have to be actually
working if their activity is controlled or their freedom to do as they choose is restrained by the
employer. Under the "subject to control" clause, it is the level of the employer's control over its
employees which is determinative, rather than the mere fact that the employer requires the
employees' activity. (Morillion, supra, 22 Cal.4th at 587)

    Regarding the "suffered or permitted to work" clause for establishing compensability

within the hours worked language in the IWC Order, the Morillion court noted that it encompasses
a meaning distinct from merely working. (Morillion, supra, 22 Cal.4th at 584) It includes time an
employee is "suffered or permitted to work, whether or not required to do so." Thus, it may
include time an employee is working but who is not subject to the employer's control such as
when an employee works unauthorized overtime and the employer knows or has reason to believe
that the employee is continuing to work. (Morillion, supra, 22 Cal.4th at 585)

   Thus, if the activity is performed under (1) the control of the employer, or (2) performed

under less or no control but the employer knows or has reason to know that the employee is
working, the activity constitutes compensable "hours worked" under the IWC Order.

    Significantly, your request letter maintains that the time spent to enroll for a TWIC card is

"indispensable to the performance of the principal activity the employee is hired to perform." This
position speaks to the status of the requirement for enrollment rather than being probative of the
actual level of employer control during the enrollment process, which is the appropriate inquiry
under the "hours worked" analysis. The facts presented indicate no control by Shell of the
employees during the actual TWIC enrollment process. Applicants for the TWIC card are able to
pre-enroll on line at TSA's website and otherwise schedule an appointment at the TWIC
enrollment center at a time that is convenient for the applicant. We cannot conclude that time
spent by Shell's employees enrolling for a TWIC card is time during which the employee is
subject to the control of the employer simply because the employer requires the employee's
possession of the TWIC card or that the possession of the card is indispensable to the performance
of the principal activity.

     Additionally, since the "suffered or permitted to work" clause can be an alternative to

establishing compensability within the hours worked language in the IWC Order, review of the
enrollment process under this factor is appropriate. The enrollment process conducted by TSA, as
described both in your letter and the program rules and guidelines, indicates that the process is
completely managed and performed pursuant to federal requirements and procedures. Further, the
activities performed by employees required for enrollment (setting and attending of an
appointment at a TSA enrollment center, providing biographical information finger-printing,
sitting for photograph, and subsequent return to pick up the TWIC card) involves a process which
solely relates to the federal agency's enrollment requirement and its role in performing a security
threat assessment on the individual who is or will be allowed unescorted access to secure areas at a
port facility. These activities performed by the employee are not activities for which the employee
is "suffered or permitted to work" for the employer.¹³

  While there may be some benefit to Shell insofar as TWIC enrollment of covered

employees also contributes to Shell's compliance with its federally mandated security obligations,
the fundamental nature and effect of the TWIC enrollment process is a matter of port security
established by federal public policy and subordinates such ancillary benefit to the employer. (Cf.
DLSE Op. Ltr. 2002.01.29 [employer's decision that transit operators end their shift at a different
location than where shift began forced employee to spend some fixed amount of time traveling
was purely for benefit of employer and compensable])

   TWIC enrollment is not an employer-imposed activity but a government mandated

procedure requiring compliance with established enrollment procedures at specified centers for the
purpose of performing threat assessment under federal law. The actual time spent enrolling is not
performing work for Shell because the employee is not subject to the control of the Shell nor
suffered or permitted to work for Shell within the meaning of the State's hours worked
requirement.¹⁴

¹³ The above analysis is conceptually consistent with a recent DLSE opinion letter which opined that pre-employment
state mandated security officer training is not compensable under IWC Order 4-2001 and MW-2007 where no work is
performed directly or indirectly for security operators authorized to conduct such required training by the participants
who were trained. (DLSE Op. Ltr. 2007.08.29) Under the security guard training program reviewed in the opinion
letter, the training was for their own advantage (and at no cost) in order to become state-qualified security guards.
Participants received certificates for courses successfully completed which could be used in other employments with
other operators in the industry.
¹⁴ Similarly, Labor Code §2802 obligates employers to reimburse employees for all necessary expenditures or losses
incurred in the direct consequence of the discharge of his or her duties. DLSE has interpreted this obligation as not
requiring an employer to pay for training leading to licensure or the cost of licensure. (DLSE Op. Ltr. 1994.11.17). In
the opinion letter, DLSE stated that "The most important aspect of licensure is that it is required by the state or locality
as a result of public policy. It is the employee who must be licensed and unless there is a specific statute which
requires the employer to assume part of the cost, the cost of licensing must be borne by the employee." (Id.) In the
instant matter, the employer has chosen to pay the TWIC enrollment fee for its employees and, in certain
circumstances, reimburses for mileage.

    Your letter also maintains that the TWIC requirement is "a special requirement or

condition for continued employment similar to a required drug test or a physical examination"
which is compensable. You cite two U.S Department of Labor (DOL) opinions that determined
that time spent on mandatory physical examinations and drug testing must be compensated where
the subject activity is beneficial to the employer. (DOL Op. Ltr. 9/15/97 [mandatory drug testing
& physical exams] & 1/26/98 [mandatory drug & alcohol testing])

    As noted in Morillion, the FLSA does not include an express definition of "hours worked"

but the phrase is defined in federal regulation utilizing language different from the IWC Orders.
(Morillion, supra, 22 Cal.4th at 588-589; see also, DLSE Op. Ltr. 2002.01.29) Notwithstanding
the improper reliance upon federal interpretations of different language to interpret the IWC
definition of hours worked, the DOL opinions are distinguishable.

    The DOL opinions are based upon a premise that where the Federal government requires

employees to submit to physical examinations and drug testing as a condition of the employer's
license to operate its business, such tests are for the benefit of Shell. DOL indicated that the time
spent in these activities is time during which the employee's freedom of movement is restricted for
the purpose of serving the employer and time during which the employee is subject to the
employer's discretion and control. Since the testing are essential requirements of the job and
primarily for the benefit of the employer, the time so spent must be counted as hours worked under
the FLSA.

   Here, our reading of the underlying federal law for TWIC and the facts described compels

the conclusion that the TWIC program is not primarily for the benefit of Shell but is required for
public policy objectives in implementing national port security. Again, enrollment for TWIC
cards is based solely on the presence of an employee at a location covered by federal law—
regardless of their abilities or job duties. The requirement is based solely on whether, in the
performance of his or her job, the employee is required to be in a designated secured area in a
covered port facility. While there is an obvious ancillary benefit to owners or operators who will
have a security screened workforce, the findings of Congress for enacting MTSA do not recognize
or declare a benefit to an employer as an expressed objective of the legislation.

    Drug testing and physical examinations are intended to reveal physical conditions of the

drivers that directly impact their ability to effectively and safely perform their job. Enrollment in
the TWIC program is required for evaluation of the individual as a security threat which is based
only upon their need to be at a regulated location at a port facility while performing their job.
TSA's assessment does not depend on job abilities or performance.

     Additionally, unlike the mandatory drug testing and physical examinations discussed in the

DOL opinions which requirement is linked to a particular employer whose license to conduct its
business is conditioned upon testing, the TWIC enrollment is a type of certification or
determination by the government that the individual does not pose a security threat under federal
criteria. The card is valid for five years from the date of issuance and is subject to surrender only
to the TSA for specified conditions. The TWIC card is portable for application in other covered
port employments where access to secure areas is required, and thus, not linked to continued
employment with a specific employer. Thus, the effect of the underlying testing requirement on
the employment relationship and the facts present in the DOL opinions fundamentally differ from
the TWIC enrollment requirement.

    As pointed out in Shell's letter, other federal interpretations under the FLSA, although not

controlling, which address compensability for time spent in government-mandated training or
licensing contexts supports the view that such time is not compensable.¹⁵ The salient points in
these federal interpretations are that the government program is mandated, the requirement is for
the advantage of the employee, and is not a condition of employment for a specific employer.

    While the TWIC card enrollment is technically not a "license" it is a government mandated

requirement which is a type of certification by the government based upon a determination that an
individual has undergone a threat assessment and is authorized (pursuant to the TWIC card issued
by TSA) to access unescorted secure areas at port facilities. There are no facts asserted which
indicate that the employer imposes requirements for enrolling in TWIC which are additional to or
beyond the federal government's requirements. Thus, these DOL interpretations under the FLSA
similarly point in the direction consistent with our interpretation and also demonstrate that state
law requirements are not undercutting minimum federal requirements.

¹⁵ See DOL Op. Ltr. 9/15/97 [non-exempt employees not required to be compensated for training for state-imposed
license requirement]; DOL Op. Ltr. 9/30/99 [licensed vocational nurses required to undergo continuing education
every two years not required to be compensated; state-required training which is not a condition of employment for a
specific employer deemed to be voluntary provided the employer does not impose additional requirements]; DOL Op.
Ltr. 8/2/97 [time spent by corrections officers in attending state-mandated training for certification to work at
correctional facilities is not compensable].

    Lastly, you maintain that the employer has an affirmative duty to provide its employees

with a safe workplace and, in bringing its workforce into compliance with the TWIC program, the
employer benefits because it can promote itself as a safer working environment to potential
employees and clients it can avoid potential sanctions from not following its Coast Guard
approved security plan. You recognize that the TWIC program's purpose is unquestionably
national security but further maintain that such security includes safety of the employees who
work in the refinery. You rely upon DLSE Opinion Letter 1993.01.19 which underscores the
affirmative obligation for employees to furnish a safe workplace under Labor Code §6401 and the
recognition that safety benefits inure to the employer as well as the employee.

    The 1993 DLSE opinion letter addressed compensability of safety training required by

industry participants in a trust which created a safety program designed to implement specific
health and safety laws, including Labor Code §7850, et seq., under the California Occupational
Safety & Health Act. DLSE's analysis recognized that the Legislature placed the onus upon the
employer to furnish a place of employment which is safe and healthful. Pursuant to several cited
Labor Code provisions regarding workplace safety and health laws which place the onus for
compliance on the employer, DLSE concluded that the rationale for imposing the obligation to pay
for safety training was based upon the clear obligation of employers to provide a safe workplace
and do all things necessary to carry out that mandate as required under state safety laws. DLSE
further concluded that the same rationale applied to applicants such that the employer could not
escape its obligations under safety and health laws simply by requiring that the potential employee
acquire the required training at his own cost as a condition of employment since such effort would
thwart the legislative mandate. We further noted in the opinion letter that there was no provision
in the Labor Code which would require that the employee must obtain any safety certification or
meet any credential requirements.

    In the instant matter, the TWIC card enrollment, as extensively discussed above,

implements legislative policy to address and improve security at the nation's port facilities. The
enrollment requirement imposes the obligation to have a government issued security credential on
the employee. Unlike the trust consisting of industry participants who created the certification
requirement, the source of the obligation to enroll in TWIC is solely contained in federal law. And
unlike a safety training requirement imposed by industry participants designed to implement
jobsite safety goals set by the legislature in the context of a statutory scheme which clearly
obligates the employer to provide workplace safety, TWIC enrollment requirement consists of the
federal government directly implementing a security measure for a port facility under a national
policy based upon security objectives.

   There is no doubt that implementation of federal security objectives at a facility may have

an ancillary benefit for employers who are independently obligated to provide a safe workplace
under the state's safety and health laws. Any overlap of the two laws, however, cannot be the
basis for blurring the fundamental nature of the TWIC enrollment requirement and process
mandated by the federal government with state safety and health obligations placed on employers in view of the
inherent differences between the source and nature of the respective statutory obligations. Any
ancillary benefit to the employer who will have a compliant facility by successful TWIC
enrollment does not provide the basis for concluding that, as a legal matter, the time spent by
workers who are required to obtain the TWIC card is compensable as a direct discharge of the
employer's state safety obligations. Such interpretation would require an expansion of the scope
of the federal law which is beyond state authority as well as interpose a position that TWIC
enrollment satisfies specific obligations under Cal/OSHA provisions which is beyond the
enforcement role of DLSE.

   We conclude that based upon the facts presented in this matter, the time spent by Shell's

employees in enrolling for a TWIC card is not compensable under the "hours worked" requirement
of IWC Order 1. The TWIC program which requires a prescribed card for employees who in the
performance of their jobs have unescorted access to secured areas of a port facility is not a
working condition which Shell controls. Rather, the requirement and enrollment process is
fundamentally and pervasively a federally mandated obligation which implements an independent
public policy to establish security in the ports fundamental to national security. The activities for
enrollment to be performed by employees are governed by federal procedures for which Shell does
not control within the meaning of the State's "hours worked" requirement.

    This opinion is based exclusively on the facts and circumstances described in your request

and is given based upon your representations, express or implied, that you have provided a full and
fair description of all facts and circumstances that would be pertinent to our consideration of the
questions presented. Existence of any other factual or historical background not contained in your
letter might require a conclusion different from the one expressed herein. You have represented
that this opinion is not sought by a party to pending private litigation concerning the issues
addressed herein. You have also represented that this opinion is not sought in connection with an
investigation or litigation between a client or firm and the Division of Labor Standards
Enforcement.

   We hope that the above responds to your inquiry.

                                  Very truly yours,

                                  Robert R. Roginson
                                  Chief Counsel

RRR:

Cc: Labor Commissioner Angela Bradstreet
Angel Gomez, Epstein, Becker & Green