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A recent Supreme Court decision involving the compensation of poultry and meat processing workers has implications for employers in other environments, particularly those where employees work remotely, according to Lisa A. Schreter, a management attorney with Littler Mendelson PC in Atlanta.
In a unanimous decision, the Supreme Court ruled Nov. 8 that the compensable workday under the Fair Labor Standards Act (FLSA) includes the time that covered employees spend walking from changing areas where they don protective gear to the production area and the time they spend walking back at the end of a shift (see In donning, doffing case, Supreme Court defines workday expansively, HR News, Nov. 8, 2005).
Employers should not assume, however, that the decision’s reach is limited to those worksites that require employees to wear special safety equipment, Schreter cautioned. “You can’t dismiss the case as easily as that.”
When does workday really start?
The ruling basically is an off-the-clock work case with “important lessons for employers” about compensation practices, Schreter explained in a Nov. 11 interview. The decision highlights the need for employers to capture all compensable time, including work performed before employees clock in, she said.
As a practical matter, it has become much more difficult for employers to determine when the workday starts. Employees increasingly work from home on computers, check their wireless devices for work-related messages and call in to discuss assignments. Aside from donning unique safety equipment, what other activities may be enough to start the compensable workday?
What if an FLSA-covered employee calls from home to chat with a supervisor about work for 45 minutes before coming in? The employee’s commute, typically not compensable, arguably may be analogous to the walk from the locker room to the production job floor, Schreter noted.
Or suppose a non-exempt worker comes into the office, flips on the computer and then goes down to the cafeteria to shoot the breeze with co-workers for 45 minutes. Did the workday start when the employee turned the computer on?
The Supreme Court ruling leaves a lot of unanswered questions, Schreter said. There is not much case law shedding light on whether switching on a computer is too minimal an activity to be captured by employer’s compensation schemes, although, she said, there is a good argument that it is too brief to capture.
Nevertheless, employers should tread cautiously. The court’s refusal, once the compensable workday has started, to carve out a discrete block of time as noncompensable, provides a powerful incentive for employers to examine their wage and hour practices—in particular their recordkeeping for compensation systems, Schreter observed.
An uninterrupted lunch period of at least 30 minutes is not compensable. But a break of less than 20 minutes is compensable. Whether a break of at least 20 minutes but less than 30 minutes is compensable is a gray area, but arguably it is not when the worker is completely relieved of duties, she said.
To ascertain when a covered employee’s compensable workday starts, Schreter recommended that employers scrutinize:
• Where non-exempt employees work (e.g., do they work remotely?).
• Whether employees engage in work before their start time.
• The nature of those activities.
• Whether employees engage in activities (such as commuting) that in the past were presumed to be noncompensable, but now may be compensable because of work activities from remote sites.
Employers also should review the physical layout of the workplace and where employees clock in, she added. Employers that require workers to don safety gear may consider moving time clocks to locker rooms, for example.
Schreter recommended reviewing policies and training workers about how to record their time. She is often “surprised by the lack of attention given to telling employees how to record their time.”
Employers that fail to align their compensation practices with the Supreme Court ruling may expose their organizations to FLSA liability, which can be extensive given the prevalence of class actions, she cautioned.
Windfall for workers
“I heard someone talk about the Supreme Court being removed from the practical difficulties” in the workplace, Schreter reflected. “I think that’s true.”
Even if walking from point A to point B involves only a short distance, people rarely walk between two points without stopping to chat with others, dilly-dallying in some way or going to the restroom. Employers do not like having to pay for all of that time simply because someone has on their safety gear, she commented.
Schreter predicted the ruling will fill out the sails of the plaintiffs’ bar as employees seek compensation for other time worked before clocking in.
Kevin Russell, an attorney with Goldstein & Howe PC who represented some of the employees in the Supreme Court case, forecast that the case has “potentially broad application.” Russell was “very pleased we prevailed on the major claims in this case.”
In particular, he thought it was significant the Supreme Court deferred to the Department of Labor’s regulations. “This may carry over in other areas” where employers think the regulations are not reasonable, he stated.
Developing a ‘Clock-Work’ State of Mind: Avoid ‘Off-the-Clock’ Work Claims by Nonexempt Employees, SHRM Legal Report, July-August 2004.
Allen Smith, J.D., is senior legal editor for HR News.
For the latest HR-related business and government news, go daily to www.shrm.org/hrnews
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