WHAT IS WORK? FLSA Pitfalls at the Beginning and End of the Workday03.26.10
By Mark A. Shank and Bridget A. Blinn1
The basic requirements of the federal Fair Labor Standards Act (“FLSA”) are easy to understand. Employees must be paid a minimum wage of $7.25 per hour (per the latest increase that went into effect in July 2009). Employers must also generally pay nonexempt employees overtime at a rate of at least one and one half times the regular rate of pay for all hours work in excess of 40 hours in a work week.2
These two seemingly simple requirements are surprisingly difficulty to implement. Getting it wrong can be costly: Employers found liable for violations of the FLSA may be assessed damages for the unpaid overtime or minimum wages, liquidated damages equal to the amount of unpaid overtime or minimum wages, and reasonable attorneys fees and costs. Willful violations may carry criminal penalties upon conviction with fines of not more than $10,000 or imprisonment for not more than six months, or both, and there are also civil money penalties (payable to the Secretary of Labor) for repeated and willful violations of minimum wage and overtime requirements.
Under the FLSA, it is an absolute rule that employers must pay their employees for all hours the employees work. Confusion arises around this question: “What constitutes hours worked?” The courts and Congress have gone back and forth expanding and narrowing the definition of hours worked in the years since the law first passed in 1938.
Since the FLSA does not define the term “work”, the United States Supreme Court began by defining “work” as “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” It applied that definition to include time spent traveling from the entrance of ore mines to the underground working areas. Shortly thereafter, the Court clarified that exertion is not necessary for an activity to count as “work.” The Court explained, “An employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen.” Two years later, the Supreme Court defined “workweek” to include “all time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed workplace” and held that time employees spent walking from time clocks at a factory entrance to their workstations was compensable work time under the FLSA.
At that point, Congress weighed back in through the Portal to Portal Act to limit the liability of employers for certain activities. Certain activities, such as (1) walking, riding and traveling to and from the actual place of work; (2) clothes changing in certain circumstances; and (3) other activities that are preliminary to or postliminary to principal work activities were excluded from compensable work. However, the Portal-to-Portal Act did not change the Supreme Court's earlier definitions of the term “work.” The U.S. Department of Labor then adopted regulations to help clarify what counts as time worked. Essentially, activities that are “primarily for the benefit of the employer” and that are “suffered or permitted by an employer” constitute compensable work time. In the litigation context, courts apply a general rule that an employer is liable for off-the-clock work if the employer knew or should have known that the employee was working.
The Supreme Court affirmed the U.S. Department of Labor's position in relation to two key concepts (integral and indispensable activities and the continuous workday rule) that impact what counts as work and when work time starts and ends. Initially, the Court concluded that work includes both an employee's principal activities as well as activities that are “integral and indispensable” to the principal activities. It applied this rule in finding that changing into and out of old work clothes at a battery plant was an integral and indispensable part of the employees' work and, thus, compensable and that time spent by workers in a meat packing plant sharpening knives was integral and indispensable and, thus, compensable. Activities which are integral and indispensable to principal activities are themselves principal activities that start the work day. However, the Court recognized that activities - such as walking between a time clock and an employee's work area and waiting to punch a clock or receive gear - that occur outside of the continuous workday do not count as compensable work time.
To further complicate matters, even if activities constitute work, under some circumstances, the amount of time spent on such activities is so minimal or de minimis that they are not compensable. The de minimis doctrine was set forth by the Supreme Court and “provides a limiting principle to compensation for trivial calculable quantities of work”. If it is administratively difficult to record the small or infrequent work time, the time may be de minimis and not compensable. For example, time spent by handlers in dog-care duties during their commute was considered de minimis and non-compensable because the time was not substantial, not regularly occurring and it would be administratively difficult to track it.
So, although the Department of Labor and the courts have provided general guidance as to what activities constitute work that must be compensated, the application of the general concepts is often difficult. This is especially true with respect to time at the beginning and end of the workday. Decisions applying these rules are not always intuitive.
Employees must be paid for all actions taken on behalf of their employers regardless of the location where the activities actually take place. Thus, if employees engage in work-related activities at home before they leave for work, those activities could be considered compensable work time. Such time could include time checking voicemail or emails; time developing a plan, schedule, or route for the day; time reading or completing required paperwork; or time loading or stocking equipment. For instance, a federal court in East Texas concluded that employees who drive employer cars home should have been paid for all time spent cleaning and maintaining the vehicles. Whether such activities count as compensable work time depends on a number of factors.
Activities must be primarily for the benefit of the employer to count as hours worked. For instance, there is a difference between employees who are planning their day (including work) for their personal benefit and employees who are required to prepare detailed driving plans before they leave their homes. Second, the activities must be principal activities or integral and indispensable to principal activities in order to count as worK.
They could otherwise be disregarded as preliminary or postliminary time. Third, even if activities at home could constitute work, such time is only compensable if the employer knew or should have known that an employee was engaged in such activities. Thus, a key question is whether an employer should have reasonably anticipated that its employees would have to engage in such activities at home. Finally, if the activities at home are limited, isolated, and sporadic, any time spent on such activities may fall within the de minimis doctrine.
Under the Portal-to-Portal Act, time spent commuting between an employee's home and the workplace was intended to be non-compensable. Federal courts have emphasized that employees advancing commuting time claims face a heavy burden of proof. Thus, the general rule that commuting time is not compensable holds true even though the employees:
- Spend hours each day commuting between their homes and their job sites. (Even commute time that lasted as long as seven hours each day has been found non-compensable).
- Transport equipment from their homes to their job sites.
- Travel to different job sites each day. (Even when the employee traveled to more than 50 stores throughout New York and Connecticut).
- Travel with other employees to get to and from work.
- Discuss work-related issues during their commute.
- Travel to and from work on company buses. (For example, construction workers who were “required to ride authorized transportation after the security gate” at an airport construction project and farm workers who took company buses to the fields were not engaged in work).
As one court in Florida explained: “[E]mployees should not be compensated for doing what they would have to do anyway – getting themselves to work.”
Because employees started to assert claims for time spent commuting in company cars, Congress passed the Employee Commuting Flexibility Act of 1996 (the ECF Act) to clarify that commuting in a company-owned vehicle is not compensable work time unless employees are required to perform additional legally cognizable work while driving to their workplace in order to compel compensation for the time spent driving. Thus, as with commuting time in personal vehicles, federal courts have rejected claims for time spent commuting in an employer-provided car, even when employees travel to different work locations, talk about work, or transport equipment. Such travel time in government-issued vehicles was not compensable even when the employees were required to carry their weapons, transport law enforcement equipment, monitor the vehicles' communication equipment, lookout for suspicious activity, refrain from personal errands or detours, and stopping to walk their dogs.
Additionally, activities “incidental” to use of a company vehicle for commuting are not principal activities that count as hours worked. For example, one court found that end-of-day reports and transportation of tools are to an employee's use of a company vehicle for commuting and, thus, time spent on these activities was not compensable under the FLSA.
Despite the clear presumption against compensation for commuting time, plaintiffs continue to pursue such claims. Three areas of particular concern to employers should be:
- The need for a specific agreement between the employer and the employee (or employee representative) that governs the use of a company car for commuting. Absent such an agreement, the protections of the ECF Act are lost.
- The distinction between commuting time and travel to another city. Even though commuting time is not compensable (even when it takes hours each way), an employee must generally be paid for time traveling to work on special one-day assignments to a city other than where they regularly work. This provision is aimed at “unusual” assignments and does not apply to employees who are regularly asked to travel to different job sites.
- The impact of the continuous workday rule on the general commuting time rules.
The importance of determining when an employee first engages in a work activity is highlighted when considering that the Supreme Court has found that waiting and walking time that occurred prior to the first work activity was not compensable; however, waiting and walking time that occurred after the first work activity counted as hours worked and must be compensated. Following this same analysis, a number of recent cases have focused on the compensability of what would appear to be non-compensable commuting time because the commuting allegedly occurred after employees engaged in their first work activity. These claims included commuting time between dispatch halls and assigned worksites and a claim by service technicians for time commuting to first worksite because their first work activity occurred at home when they checked the employer's dispatch system.
In order to address security risks and enhance safety, some employers have employees pass through security checkpoints when they first arrive at the work site. In response, some employees have claimed that time spent passing through security checkpoints counts as time worked because the employees are subject to the control of the employer. The Second Circuit Court of Appeals has rejected the idea that the time-consuming nature of security measures makes them compensable. Drawing a parallel to lengthy commuting time, the Court explained that “security measures that are rigorous and that lengthen the trip to the job-site do not thereby become principal activities of the employment.” When considering a similar claim by construction workers who had to pass through airport security at the Miami International Airport, the Eleventh Circuit applied a three-factor test: “(1) whether the activity is required by the employer, (2) whether the activity is necessary for the employee to perform his or her duties, and (3) whether the activity primarily benefits the employer.” The court found that the employer did not primarily benefit from the security regime and concluded that “the security screening mandated by the FAA in this case is not compensable work.”
Whether clothes changing and donning and doffing of protective equipment count as work time can depend on a number of factors: What are they changing into or donning? Is it necessary or required? Where does the changing or donning and doffing activity occur? Is there a relevant bargaining agreement? Two key questions will help employers determine whether they need to pay for clothes changing or donning and doffing activities. First, is changing into or out of the clothing or protective equipment integral and indispensable to a principal activity so that it would normally fall within the definition of hours worked? Second, if changing would typically count as hours worked, does the activity fall within the scope of an exclusion?
The Supreme Court considered whether workers in a battery plant were entitled to compensation for time spent changing clothes at the beginning of the shift and showering at the end. These employees were required to “make extensive use of dangerously caustic and toxic materials” and were “compelled by circumstances, including vital considerations of health and hygiene, to change clothes and to shower in facilities which state law require[d] their employer to provide.” The employees routinely worked with or near toxic chemicals that “permeated the entire plant and everything and everyone in it;” placed the workers' families in danger; were discovered in the workers' bodies at abnormal levels; and required the workers to engage in changing activities for 30 minutes each day. Under these facts, the Court held that the workers' changing activities were an integral and indispensable part of their principal activity, the production of batteries, and therefore compensable work time under the FLSA.
The Supreme Court drew a distinction between the circumstances in that case and “the question of changing clothes and showering under normal conditions,” because the Government acknowledged that such activities “ordinarily constitute ‘preliminary' or ‘postliminary' activities excluded from compensable work time.” Normal clothes changing is preliminary time that is not compensable. Beyond this general standard, subsequent guidance suggests that changing time does not count as work time if employees have discretion whether to wear particular clothes or equipment and/or have the option to change at home.
Initially, the Department's guidance and the relevant court decisions on changing time assume that any clothing or equipment is required by law, employer rules, or the nature of the work. Optional clothing and equipment, which some employees choose to wear and others do not, are not integral and indispensable and, thus, time spent changing into such clothing does not count as work time. This is ordinary changing activity. Moreover, even if changing is required by law, rule, or the nature of the work, changing activities that occur at home do not count as work and are not compensable. As the Tenth Circuit explained: “Requiring employees to show up at their workstations with such standard equipment is no different from having a baseball player show up in uniform, a businessperson with a suit and tie, or a judge with a robe. It is simply a prerequisite for the job, and is purely preliminary in nature.” Similarly, if employees are free to change into required clothes or equipment at home but choose to change at their work site, the changing time still does not count as work.
In contrast to situations where employees have flexibility or a choice, where changing of clothes on the employer's premises is required by law, by rules of the employer, or by the nature of the work, the changing activities are considered integral and indispensable to the employees' principal activities. Some courts hold that this is true regardless of how simple the equipment or donning and doffing activities are. In contrast, other courts have concluded that donning and doffing of non-unique protective gear (which usually takes a small amount of time) is not integral and indispensable to a principal activity and, thus, is not work time.
If an employer has such requirements, the next question is whether the activity falls within the statutory exclusion, which states in pertinent part:
Hours Worked – in determining . . . the hours for which an employee is employed, there shall be excluded any time spent in changing clothes or washing at the beginning or end of each workday which was excluded from measured working time during the week by the express terms of or by custom or practice under a bona fide collective bargaining agreement applicable to the particular employee.
The initial question that arises in relation to this exclusion is whether the employees are subject to a bargaining agreement. If so, then a more detailed analysis is warranted. If not, then changing time that is integral and indispensable may need to be compensated. If the employees are subject to a bargaining agreement, the next question is whether the agreement contains express provisions addressing the compensability of clothes changing time or whether the parties have a custom or practice on the subject. For instance, the Third Circuit applied this exclusion to affirm dismissal of clothes-changing time claims by city correctional officers. The plaintiffs' union had never formally requested collective bargaining over the city's policy, nor had it otherwise challenged the policy by grievance or arbitration demand.
Finally, the most significant dispute that often arises in relation to this exclusion is what activities are covered by the term “changing clothes.” Coveralls, shirts, pants, and common workplace uniforms clearly fall within this concept. In addition, the Department of Labor has found that this clothing includes, among other items, heavy protective safety equipment worn in the meat packing industry such as mesh aprons, sleeves and gloves, plastic belly guards, arm guards, and shin guards.
The Ninth Circuit rejected the Department's interpretation, explaining that the exclusion must be narrowly construed against employers, and found that the section did not apply to specialized protective gear because that gear was “different in kind from typical clothing. Other courts have disagreed. The Eleventh Circuit found that smocks, hair/beard nets, and gloves fit squarely within the commonly understood definition of clothes as that term is used in the exclusion. The Eleventh Circuit directly contradicted the analytic approach used by the Ninth Circuit in its Alvarez decision, explaining that construing the exclusion narrowly against employers as an FLSA ‘exemption' contravenes not only basic tenets of statutory construction but also the readily apparent intent of the legislators who approved the amendment's language. In its most recent pronouncement on the subject, the Department of Labor suggests that employers outside of the Ninth Circuit may interpret section the exclusion as applying broadly, whereas those employers within the Ninth Circuit must use greater caution.
Because employees continue to pursue compensation claims in relation to clothes changing and donning and doffing time, employers should consider a few steps that may undercut any such claims:
- Can the clothes, uniforms, or equipment be optional rather than required? This may not be possible with safety equipment, which is necessary to protect employees and minimize workplace injuries. Work clothes are another matter. Most employees would opt to use company-provided work clothes rather than having to provide their own work attire, thus the question is whether an employer can tolerate the few employees who decide not to wear company-provided work clothes. To minimize the impact of employee-selected attire, employers can adopt rules specifying what types of clothing are acceptable.
- Can the employees change at home? Again, this may not be possible (or preferable) with expensive safety equipment. Employers may also be concerned about the loss of uniforms and equipment. At the same time, if uniforms and equipment are checked out to employees and the employees are free to change at home or at work, any changing or donning and doffing claim is unlikely to succeed.
- Is the employer willing to provide a designated number of minutes for employees to change? The Department of Labor has endorsed such a formula approach:
An employer may set up a formula by which employees are allowed given amounts of time to perform clothes changing and wash-up activities, provided the time set is reasonable in relation to the actual time required to perform such activities. The time allowed will be considered reasonable if a majority of the employees usually perform the activities within the given time. If an employer decides to pursue this option, the employer should have a time study or other analysis that supports the reasonableness of the time it allows. Employers should also understand that this provision only applies to “clothes changing.” Thus, if donning and doffing protective equipment falls outside of that term (which some courts have held), then a formula approach may not preclude a subsequent lawsuit by employees who take longer to change.
Whether employees must be paid for waiting and walking time depends on when those activities occur and what level of control employers exercise over the activities. The most basic rule is that employees must be paid for all time during which they are on duty, regardless of whether they are actually engaged in work. Thus, employees who are required to arrive at a location and then wait for assignments must be paid for their waiting time because they are engaged by their employer at that time. In contrast, an employer generally does not need to pay employees for waiting time if the employees are completely relieved from duty and are free to use the time for their own personal purposes. Applying these rules, one Illinois court found that police cadets, who were not in class or training but who nevertheless were required to remain at the police academy, were not entitled to waiting time compensation because they were free to engage in personal activities. Similarly, the Ninth Circuit found that electric utility workers who had to reside on their employer's remote premises did not have to be paid for waiting time when they were not performing actual duties. Moreover, the Seventh Circuit found that a policy requiring police officers on sick or disability leave to remain at home unless they obtain permission to go elsewhere did not transform the time at home into hours worked.
The Supreme Court has held that whether waiting and walking time counts as compensable work time depends on whether it falls within the continuous workday. Time employees spent waiting to receive equipment and waiting to put on their work clothes and equipment did not count as hours worked. In contrast, waiting and walking time that occurred after their first principal work activity (donning unique protective gear) does count as hours worked.
When they arrive at work, some employees engage in discussions with other employees who are leaving work. Whether these discussions count as time worked depends on the purpose and nature of the discussions. On one extreme, employers do not have to pay for personal conversations between employees (unless, of course, the continuous workday has already started). On the other extreme, required discussions between employees at the end of their shift and their replacements (who are starting their shift) for the purpose of sharing operational information should be counted as time worked. In between these two extremes, employers must use judgment to assure that employees are properly recording time when they are conversing with other employees about business issues.
A more difficult issue is presented when the continuous workday rule is considered with personal conversations at the start or end of the workday. For instance, if an employee turns on a machine (as discussed below, which is seemingly an initial act of work) and then engages in a personal conversation with a co-worker, does the employer have to pay for the extended personal conversation because of the continuous workday rule? The answer is seemingly yes, at least if the discussion is relatively short in duration. If the discussion takes more than twenty minutes and especially if it occurs while the employees are getting coffee or breakfast, it may be possible (depending on the circumstances) to count this time as a meal period or extended non-compensable rest break. Alternatively, if an employer adopts specific rules limiting the amount of time that can be used for such breaks and prohibiting rogue extensions of break time, the employer may be able to exclude such unauthorized extensions of breaks from its calculation of hours worked.
When they arrive at work, employees must often take some preliminary steps with equipment to assure that they can perform their jobs. They might set up, lay out, turn on, prepare, or test computers, equipment, or tools. These activities almost certainly count as time worked. Examples include:
- turning on switches for lights and machinery
- powering up and testing an x-ray machine (integral to taking x-rays)
- lathe workers who frequently oil, grease, clean, or install new parts on their machines
- garment workers who arrive early to distribute clothing to workbenches or to get machines in readiness for operation
- knife sharpening activities are an integral part of and indispensable to the various butchering activities
Once employees engage in such activities, the workday has started and, under the continuous workday rule, any subsequent walking, waiting, or other time generally must be counted as time worked.
One area of recent focus by the Department of Labor is time spent by employees turning on computers and pulling up computer applications, especially in call center operations. If employees turn computers on and then spend time getting coffee or visiting with co-workers while computer applications boot up, the Department's position is that all such time is compensable under the continuous workday rule. If employees log into a time recording system after these initial activities, an employer could be systematically missing the first few minutes of its employees work time every day. Employers should thus be certain that their time recording systems are capable of capturing all time worked, including these initial start-up periods. As with time at the start of the day, employers must also be aware of and count work activities at the end of the day. Such activities might include putting away, rolling up, or turning off computers, equipment, or tools.
1Mark A. Shank and Bridget A. Blinn are attorneys with Gruber Hurst Johansen & Hail. They regularly advise clients and litigate FLSA issues.
2Employers must use caution when evaluating whether they comply with minimum wage and overtime requirements. Compliance with the FLSA may not be sufficient. Many states have requirements and those requirements do not always mirror FLSA standards. Thus, employers must be certain that they are complying with the FLSA and state-law requirements in every state where they have employees. This article addresses only the federal requirements.