Sleep Time for Round-the-Clock Workers May Be Compensable

​Employees of a nonprofit group home may proceed with their collective-action lawsuit alleging that they should be paid for sleep time under the Fair Labor Standards Act (FLSA) and Maine's wage laws, a district court judge ruled. The employees persuaded a judge that a sleep-time exemption did not apply, but the court allowed the employer to continue to defend itself from the lawsuit based on the grounds that the lawsuit was not timely.

Port Resources provides group housing and care to adults with developmental disabilities and behavioral health challenges. The organization assigned staff to group residences for shifts that consisted of seven days on followed by seven days off, from Thursday to Thursday.

For the purposes of payroll and overtime, Port Resources defined the workweek from Sunday to Saturday and provided eight hours of unpaid sleep time each night for the employees on week shifts. Employees received and signed a sleep-time policy and agreement that excluded uninterrupted sleep and meal periods from hourly pay, and they also had private sleep space at the residences.

Employees who worked the weeklong shift brought a collective action seeking overtime pay under the FLSA and Maine wage laws for the time they spent working during the overnight hours. The group home operator contended that the plaintiffs were exempt from sleep-time pay, in part because they resided at the facilities for an extended period, as set forth in the regulations interpreting the FLSA in the Code of Federal Regulations Section 785.23.

[SHRM members-only toolkit: Determining Overtime Eligibility]

To determine whether the employees were properly paid, the court reviewed the FLSA's regulations and the U.S. Department of Labor's (DOL's) Wage and Hour Division opinion letters and enforcement guidance that provide guidance on sleep-time pay.

In particular, the court reviewed a DOL opinion letter dated June 30, 1988, which explained that Section 785.23 requires that the employee reside on the employer's premises permanently or for an extended period of time (at least 120 hours in a workweek), the employer and the employee enter a reasonable agreement to exclude sleep time, and the employer provide a private space for employees.

Port Resources argued that the exemption applied because the employee's shifts ran for seven consecutive days and nights, and they were on duty for more than eight hours every 24 hours and slept on the premises each night.

The employees disagreed and asserted that their employer defined a workweek differently for the purposes of overtime (Sunday to Saturday) and for exempting employees' sleep time (Thursday to Thursday). The court agreed and explained that Port Services' multiple definitions of a workweek were not FLSA-compliant and akin to "having one's cake and eating it too."

Giguere v. Port Res., D. Me., No. 2: 16-cv-58 (April 27, 2018).

Professional Pointer: Employers seeking to exclude sleep time must provide sleep facilities, satisfy the workweek hours requirement, and enter into agreements with employees that are reasonable and reflect the realities of their working conditions. Many employers have prevailed in lawsuits brought by employees regarding unpaid sleep time because the agreement was considered reasonable.

Erin L. Winters is an attorney with Pacific Employment Law in San Francisco.