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November 16, 2007
Is that Time Compensable?

By Jay Schleifer, BLR

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Wage-and-hour law is making more and more headlines. Some of America's biggest corporations, including Wal-Mart, IBM, and top supermarket and brokerage fines have been hit with huge lawsuits, ending in equally large settlements.

The charge: Not properly paying workers for the hours they put in, according to rules set by the nation's Fair Labor Standards Act (FLSA).

How to pay properly under FLSA was the topic of a presentation by attorney Marjorie S. Fochtman of the San Francisco offices of Nixon Peabody, LLP. The talk was part of BLR's 2007 Employment Law Update , held recently in Lake Buena Vista, Florida .

The conference also included sessions on legislative developments, hiring, retaliation, discrimination, leave and other issues. BLR plans these updates annually.

"Off the Clock" on the Docket

Fochtman concentrated the first part of her talk on the issue of "off the clock" work ? time spent by employees on the job, but not counted in their pay. She discussed, for example, whether time spent walking from a parking lot, or waiting to punch in or out was compensable.

The standard the courts have set, she said, is whether the activity in question is "integral and indispensable" to the main job. If it is, it then becomes part of the workday under the continuous workday rule, and has to be paid.

One example of time that must be paid, she noted, was that required to boot up a computer for the day's work, even though productivity did not begin until the equipment was ready for use. The job cannot be done without the boot-up activity.

Another came from a case dealing with the meat packing industry, and involved time required to "don" or "doff" safety gear required for the job. The safety element is what made the activity paid time. Time spent changing ordinary clothes at the beginning and end of a shift has been specifically excluded from work hours by FLSA.

The question of whether initial activities start the clock has been a hot issue with field service technicians, Fochtman noted.

Because these techs usually start their day at home with a call to obtain that day's schedule, all other time until the end of the day must be paid. That includes traveling to the first job of the day, which for others would be unpaid commuting time.

"This makes this case much broader than just the meat packing industry," Fochtman observed.

Beware Violating Meal and Break Time

She then turned her attention to meal and break time, the area that has ensnared so many large employers who allegedly have made their employees work through these times without paying them.

Under federal law (some state laws differ), Fochtman said that any break period up to 20 minutes must be counted as paid time. Employers may deduct time spent on meals, she noted, so long as the meal period is at least 30 minutes in length, and the worker is completely relieved from duty during that period.

Fochtman warned, however, about computerized timekeeping systems that automatically deduct 30 minutes for lunch, as the employee may have chosen to work that time. "I think these systems are very risky," she declared. "If you do use them, have some other means of documenting whether or not the employee did take the 30 minutes."

Deduct from Perks, Not Salary

Moving to deductions from the pay of exempt workers, Fochtman warned that taking any deduction could imperil a worker's exempt status. If there was a reason to dock an exempt worker's pay, she advised taking them from any bonuses or commissions. "Leave the salary alone," she said.

Fochtman then offered her audience a "to do" list on wage and hour. It included:

  • Understand the law and classify workers [as exempt or nonexempt] properly.
  • Insist that workers keep accurate records of hours worked.
  • Have a rule against unauthorized overtime and enforce it. Note: If an employee works overtime, he or she must be paid for that time at the overtime rate. While the employer cannot dock the employee's pay for violating company policy, the employer can use other forms of discipline.

She concluded with one more bit of advice: If you audit your wage and hour compliance, have it done by an attorney. That makes it a privileged audit, which cannot be called as evidence if violations are uncovered.

"Otherwise audits are discoverable," Fochtman explained.

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