TICK TOCK IS THIS WORK ON THE CLOCK?

TODAY’S FLSA “OFF THE CLOCK” HOT SPOTS

Penelope J. Phillips Felhaber, Larson, Fenlon & Vogt, P.A. 220 South Sixth Street, Suite 2200

Minneapolis, MN 55402-4504 612-339-6321

pphillips@felhaber.com www.felhaber.com

INTRODUCTION Government Raises the Stakes The 2013 Wage and Hour Division budget request

was $237,730,000 and was aimed at supporting a “continued shift to greater directed and complaint enforcement activity.”

This request represents an increase of $6,400,000 and 57 FTE to support greater FLSA enforcement.

Also requested are $3,800,000 and 35 FTE for increased enforcement related to misclassification.

In FY 2011, 1,000 investigators completed 33,295 compliance actions and collected over $224,000,000 in back wages for 275,000 workers.

INTRODUCTION Plaintiffs Raise the Stakes FLSA case filings rose to 6,786 suits filed in 2007,

representing a jump of almost 2,400 case filings from 2006.

According to figures from the Federal Judicial Center, a record-high 7,064 FLSA suits were filed in federal court during the year-long period ending March 31, 2012. This is a drastic increase from 1993, when 1,457 FLSA suits were filed.

The 2012 data illustrates that FLSA claims are still gaining momentum and will continue to be a growing threat to employers.

WHAT DOES OFF THE CLOCK MEAN?

“Old”: requiring employees to perform before or after punching out.

“New”: any time an employee “should” be paid but is not.

EXAMPLE (WHY YOU SHOULD CARE)

8 hours a day, 5 days each week @ $15.00/hour = $600.

If you were to add ½ hour each day to hours worked = 42.5 (2.5 additional hours each week).

Employer will not have paid 2.5 hours of overtime each week = $56.25/week x 52 = $2,925.

Multiply the damages by total employees in group. Assume 500 employees in work unit who were not paid: $150,000 in lost wages.

Add penalties: Liquidated damages - $150 x 2 = $300,000. State penalties. Attorneys’ fees.

NOTABLE SETTLEMENTS In September 2012, the DOL reached a settlement

agreement with three Boston restaurants, owned by the same individual, resolving violations of the FLSA. The settlement requires the owner to pay 70

workers a total of $675,000, which represents $337,500 in back wages plus an equal amount in liquidated damages.

In 2010, the DOL reached a settlement with a Salt Lake City-based call center (with branches in 10 states) in which it paid 15,862 workers $1,978,147 in back wages for overtime violations.

In June of 2012, the DOL obtained a judgment after a restaurant in Long Island continued to violate federal law after an original 2010 settlement. In a contempt consent judgment, the restaurant and its owner were required to pay $60,535 in back wages to 18 employees, and over $7,000 in civil money penalties.

In March of 2012, the DOL obtained a settlement with a university requiring it to pay $483,201 in back wages to 248 employees in the admission office and others serving as high school representatives.

NOTABLE SETTLEMENTS

WHAT IS WORK? Time spent for the benefit of the employer, with

the employer’s knowledge or forbearance, and that is integral to the employee’s principal activity, is considered work.

EXCEPTIONS TO HOURS WORKED

Portal-to-Portal Act: excludes from “work time” activities that are preliminary or postliminary to the employee’s principal activities. Includes: Walking, riding, traveling to and from

the actual place of performance of the principal activity or activities which such employee is employed to perform.

EXCEPTIONS TO HOURS WORKED

De Minimis Time “When the matter in issue concerns only a few

seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded.”

Factors: (1)The aggregate amount of compensable work; (2)The regularity of additional work; and (3)The amount of daily time spent on the additional work.

PRELIMINARY AND POSTLIMINARY WORK

IBP v. Alvarez: Ostensibly about “donning and doffing” unique safety equipment.

The Supreme Court established guidelines for the kinds of preliminary and postliminary activities that are integral and indispensible to employees’ work.

If preliminary or postliminary work is integral and indispensible to the employee’s principal activity, the work is not excludable and must be counted as hours worked.

Alvarez noted that even if work is considered “necessary,” it is not automatically deemed “integral and indispensable.”

BURDEN OF PROOF The employee must establish a prima facie case

that he or she was not paid for compensable time and that employer did not keep accurate records.

Burden Shifts to the Employer to prove: The actual hours worked; or That the employee’s testimony regarding the

amount of hours is not credible.

OFF-THE-CLOCK VIOLATIONS

(1) “Start Early, Stay Late” Violations: employees required to punch out at the end of their shift (or not allow them to punch in before their shift), but employer requires them to continue (or start) work.

(2) “Booting-Up and Shutting-Down” Violations: it is possible that employees may be entitled to compensation if such activities are necessary to business and primarily for the benefit of the employer, if such time is not de minimus.

(3) “Acquiescent Work” Violations: employees engage in unauthorized (but compensable) work, but an employer’s policy does not pay the employee for unapproved hours worked.

OFF-THE-CLOCK VIOLATIONS

(4) On-Call Compensation: employees are considered working on-call when they are required to remain on the employer’s premises or so close thereto that they cannot use the time for their own purposes.

(5) Missed Breaks: rules differ for rest, meal, and milk breaks.

(6) Donning and Doffing: employees are not compensated for donning and doffing protective gear that is “integral and indispensable” to the employees’ “principal activities.”

(7) Miscellaneous

START EARLY—STAY LATE “Traditional” Off-the-Clock Violation For example, an employer allowing or requiring

employees to clean up workplace, paperwork and other duties off the clock before or after the paid shift.

START EARLY—STAY LATE Thompson v. Speedway (D. Minn. Jan. 20, 2009). Managers at defendants’ stores alleged that they

were instructed not to report any time worked outside of their scheduled hours.

Unreported time included gasoline price surveys and responding to telephone calls.

Court denied class certification because only 8 of the 8,000 prospective class members opted in.

START EARLY—STAY LATE Jennings v. Cellco P’ship (D. Minn. July 2, 2012). Plaintiffs brought a Motion for Conditional Class

Certification, which the court granted, distinguishing the case at hand from Thompson.

Plaintiffs asserted that Defendant forced them to work without pay by training and instructing them to only submit time once they were logged into their phones and not to record any pre-shift login and post-shift logout time.

START EARLY—STAY LATE Jennings v. Cellco P’ship (D. Minn. July 2, 2012). The Jennings court indicated that, “[b]y contrast, in

Thompson v. Speedway SuperAmerica, the court denied a motion to certify a conditional class where it was alleged that the defendant did not compensate the plaintiffs for tasks, including answering work-related phone calls and performing gas-price surveys despite corporate policies requiring the defendant to pay for those activities. The plaintiffs there had failed to show ‘the reason why the employees were not compensated for these tasks is not because of human error or a rogue store manager, but because of a corporate decision to ignore [defendant’s] published policies[.]’”

BOOTING UP AND SHUTTING DOWN

Is it Compensable? Is it Work?

Because it is typically a “preliminary or postliminary activity,” it must be integral to the employee’s principal activities to be compensable.

Is it de minimis? Reich v. Monfort Inc., 144 F.3d 1329 (10th Cir.

1998), the court held that preliminary and postliminary activities amounting to 10 minutes per day were not de minimis.

BOOTING UP AND SHUTTING DOWN

Rutti v. Lojack Corp. (9th Cir. Aug. 21, 2010). Rutti was an employee who installed and repaired vehicle

recovery systems. He worked out of his home in California, driving a

company vehicle to customer sites. Sued for “commuter time” and “off-the-clock” work. Sought compensation for two types of “Off-the-Clock

Work”: Before Work: checking the computer for his daily

assignments and then mapping his route for the day. After Work: (approx. 15 min.) Rutti was required to

transmit data to the company’s computer, using the company’s modem, every day in order to complete the day’s work.

BOOTING UP AND SHUTTING DOWN

Rutti v. Lojack Corp. (9th Cir. Aug. 21, 2009). Commuter Time:

Rutti spent driving was deemed “incidental” to his employment rather than being a “principal activity.”

Before Work “Checking Time”: Not principal activities. Alternatively, time was de minimus.

After Work “Uploading Time”: Not de minimus. Two of the three-prong test favored Rutti.

BOOTING UP AND SHUTTING DOWN

Espenscheid v. DirectSat USA, LLC (W.D. Wis. Apr. 11, 2011).

The court considered whether the time Plaintiffs spent receiving and mapping routes and performing vehicle maintenance and checks was barred by the Portal-to-Portal Act.

It determined that receiving and mapping routes and performing the maintenance mentioned above are tasks inherently related to Plaintiffs’ commute and not related to the activities of installing cable services, and as such, they were preliminary and postliminary tasks and non-compensable under the FLSA.

BOOTING UP AND SHUTTING DOWN

Bishop v. AT&T Corp. (W.D. Penn. Mar. 23, 2009). Call center employees needed to boot up their

computer and numerous applications in order to clock in.

Because AT&T required the employees to be ready to take a call at the start of their shift, the employees claimed the boot time was compensable.

Court granted conditional class certification.

ACQUIESCENT WORK What is Acquiescent Work? Working at home. Checking e-mail, voicemail, Blackberry. Why the Concern? According to the most recent Pew Research Poll on the topic:

50% check their work e-mail on weekends, and 34% do so while on vacation.

ACQUIESCENT WORK Allen v. City of Chicago (N.D. Ill. Jan. 14, 2013). Plaintiffs (Sergeants and Lieutenants) alleged that

they were expected to check and potentially respond to emails and/or calls made to their work BlackBerries while they were off-duty.

They claim they were not compensated for these activities, which amounted to them working in excess of 171 hours in a 28-day period.

ON CALL General Rules for On Call Time Compensable:

Employee is on duty. Employee is at a specific workplace or on the

employer’s premises. Not Compensable:

Employee is “completely relieved from duty.” Period is long enough to be used effectively for

the employee’s own interests.

ON CALL Stransky v. HealthONE of Denver, Inc., (D. Colo. Mar. 7, 2013). Employees filed a collective action against the their

employer, the owner of hospitals and healthcare facilities claiming they were “on call” and required to work while “clocked out” for meal breaks.

The outcome remains to be seen.

MISSED BREAK CLAIMS Federal Meal Break Rule A “bona fide” meal period exists if: (1) the meal

period is at least 30 minutes; (2) the employee is completely relieved from all duties during the period; and (3) the employee is free to leave the duty post.

Minnesota’s Meal Break Rule Minnesota requires employees scheduled for eight

or more hours in a row be given “sufficient” time to eat a meal. Minn. Stat. § 177.254.

The Minnesota Rules state that “30 minutes or more is ordinarily long enough for a bona fide meal period. A shorter period may be adequate under special conditions.” Minn. Admin. R. 5200.0120.

DIFFERENT RULES Frank v. Gold’n Plump Poultry, Inc., No. 04-CV-1018, 2007 WL 2780504 (D. Minn. Sept. 24, 2007). Workers had 30 minutes to eat, but because some

of the time was used for “donning and doffing,” the workers had less than a 30 minute meal break.

A federal judge interpreted the Minnesota Rule to mean that unless the employer can establish that special circumstances justify shorter breaks, the employer must provide a 30-minute break. “Bright-line” 30 minute rule.

Thus, the workers won summary judgment on their missed meal break claims under Minnesota law.

DIFFERENT RULES Rios v. Jennie-O Turkey Store, Inc., No. 27-CV-03-

20489 (Hennepin Co. Feb. 13, 2008). Disagreed with Frank. The Minnesota Rule, in accordance with the Minn.

Stat., requires only “sufficient time Braun v. Wal-Mart, Inc., No. 19-CO-01-9790

(Dakota Co. June 30, 2008). Also disagreed with Frank. “The statute does not require that meal times be

sufficient for ‘relaxed, enjoyable eating’ or similar language. The goal of the statute appears to be sustenance for workers. Thus, a meal could conceivably be eaten in as little as 10 or 15 minutes.”

MEAL BREAKS Tips Require Employees to Eat Away From Their Work

Area. Leave Breaking Employees Alone, Do Not Bother

Them With Work-Related Issues. Do not let employees “volunteer” to work through

the meal break unless you plan to pay them for that time.

Have a Method to Allow Employees to Report Missed Meals.

Train Supervisors on Missed Breaks. Enforce the Policy.

REST BREAKS Minnesota Rule Minn. Stat. § 177.253 (2008) provides that

employers in Minnesota must grant an employee working “four consecutive hours” “adequate” time to use the nearest restroom.

Thus, if the employee works eight consecutive hours, he or she would need two restroom breaks.

Federal Rule No obligation to provide 15-minute rest periods. Breaks < 20 minutes must be paid. Breaks > 20 minutes + employee is free to use it for

their own purposes, are not hours worked.

“Milk Breaks” for Nursing Mothers The Federal Patient Protection and Affordable Care

Act of 2010, section 4207 contains a new federal requirement that all employers provide the following to nursing mothers: A reasonable break time for an employee to

express breast milk for her nursing child for 1 year after the child’s birth; and

A place, other than a bathroom, that's shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.

MILK BREAKS

“Milk Breaks” for Nursing Mothers This new law provides two exceptions:

(1) Employers are not required to pay employees who take a breastfeeding break—unless a state law says otherwise; and (2) An employer with less than 50 employees is exempt if the requirements would “impose an undue hardship” by causing “significant difficulty or expense” as compared to the employer’s size, resources and business structure.

MILK BREAKS

“Milk Breaks” for Nursing Mothers Minnesota has had a similar law for approximately

10 years but there are some important distinctions: Minnesota:

For example, the state statute simply requires “reasonable efforts” to provide a location, other than a toilet stall, for the mother to express the milk.

The statute requires that the location not be a “toilet stall” and that the employee be allowed to express milk “in privacy.”

MILK BREAKS

“Milk Breaks” for Nursing Mothers, continued Federal law:

It seems to make finding a suitable location mandatory by declaring that the employer “shall” do this.

It mandates a location “other than a bathroom” that is “free from intrusion.” Therefore, even a comfortable lounge area inside a women’s restroom might not be sufficient unless it was physically separated from the rest of the facility to prevent “intrusion.”

MILK BREAKS

DONNING AND DOFFING Standard The time is compensable if the time spent

changing into clothes is integral and indispensable to work.

Exception (1) Bona fide CBA excludes payment; and (2) Activity constitutes “changing clothes.”

DONNING AND DOFFING Albrecht v. The Wackenhut Corp., 07-CV-6162

(W.D.N.Y Sept. 24, 2009). Security officers at a nuclear facility sought

compensation for time spent (1) arming up, (2) checking through security and (3) arming down.

District court granted SJ for Wackenhut. Rejected Plaintiffs’ claim that these duties took

roughly 15 minutes per day. The court found that all three of the processes

took less than a minute each to complete. Thus, the court found these preliminary and

postliminary activities were de minimis.

DONNING AND DOFFING Albrecht v. The Wackenhut Corp., 379 Fed. Appx.

65 (May 28, 2010). The guards appealed from the district court’s

decision granting summary judgment to the employer.

The court of appeals held that: Time spent donning and doffing uniforms and

equipment before and after shifts was non-compensable;

Time spent waiting to be issued (and to return) firearms at the beginning and end of shifts was non-compensable; and

Such time obtaining firearms and radios was de minimis.

ROUNDING Records starting and ending time to the nearest 5

minutes, one-tenth or quarter of an hour. Arrangement should average out so that the

employees are fully compensated for all the time they actually work. 29 CFR 785.48(b).

MISCELLANEOUS OFF THE CLOCK CONCERNS

Travel time Education

TIPS Time Clock

Is The Time Clock The Only Measure of Hours Worked?

If Employees Are Working, They Should Be Punched In.

If They Are Punched In, They Should Be Paid (*Even if Unauthorized*).

Punching Policies Have a clear policy regarding punching in

early/late. Enforce the policy. Train supervisors about the policy.

QUESTIONS?