Compensable “Working Time” Under FLSA Analyzed in Recent Case Law

April 17, 2015
Published in the New Hampshire Business Review

It is generally understood that an employee must be compensated for his or her time spent working. The Fair Labor Standards Act (“FLSA”) was enacted to ensure that employees receive a fair day’s pay for a fair day’s work. However, the question of what actually constitutes compensable “working time” under the FLSA can be confusing. For instance, does an employer need to compensate an employee for attending mandatory alcohol counseling? Is an employee entitled to wages for time spent walking through a theft-prevention security checkpoint at the end of his or her shift? Recent case law has examined these issues to determine whether such employer-mandated activities constitute compensable working time.

The FLSA establishes and sets forth the minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments. While the FLSA requires employers to pay their employees a wage for all the work that they do, recent case law suggests that not all work-related activities are compensable.
In order to determine whether an employee’s activity constitutes “work” for purposes of payment of wages or overtime under the FLSA, the activity must be both: (1) controlled or required by the employer, and (2) pursued necessarily and primarily for the benefit of the employer and his business. An employee’s workday consists of that period of time when the employee commences his or her “principal activity” and then ceases such principal activity or activities. A principal activity is one that is integral and indispensable to the productive work than an employee is employed to perform. Therefore, questions can arise regarding compensable working time if an employer mandates an employee to do something, or if an employee’s actions are tangentially connected to his or her principal activity.
The U.S. Supreme Court recently provided some clarity regarding whether employees must be compensated for select employer-mandated activities. In Integrity Staffing Solutions v. Busk, the plaintiffs sued their employer alleging that they were not properly compensated for the time that they were required to spend passing through a security checkpoint at the conclusion of their shifts. In a unanimous decision, the Supreme Court concluded that any time the employees spent passing through the security checkpoint was not compensable. In reaching this decision, the Supreme Court found that the security screenings were not integral and indispensable to the employees’ duties as warehouse workers. Since the plaintiffs were hired to retrieve and package warehouse products for shipment, the time the plaintiffs spent passing through the security checkpoints to ensure that no items were taken from the warehouse was deemed a noncompensable activity.
The issue of compensable versus noncompensable working time was also addressed several weeks ago by a Federal District Court in Gibbs v. City of New York. The Gibbs plaintiffs argued that they were entitled to overtime compensation for their attendance at mandatory alcohol counseling and treatment sessions which were held after regularly scheduled work hours. Even though these counseling sessions were mandated by the employer, the Court found that the plaintiffs were not entitled to compensation because the counseling sessions did not amount to work. The Court found that the employees themselves, not the employer, were the primary beneficiaries of the alcohol counseling and treatment. Furthermore, the alcohol counseling and treatment sessions were not integral and indispensable to the employees’ duties with the New York City Police Department.
As these two recent cases point out, problems and potential litigation may arise when employers fail to recognize certain time worked as compensable hours. Due to the fact-specific nature of these inquiries, compensable working time can be an area of substantial litigation and cost. Employers should be cautious and carefully evaluate whether employer-mandated activities constitute compensable working time. It is imperative that employers evaluate these situations on a case-by-case basis and seek out legal counsel if necessary. Furthermore, employers should periodically review their wage and hour policies to confirm that their employees are paid for all job duties which are integral and indispensable to the employees’ principal job activities.
Amy Goodridge, an attorney in the Employment Law Practice Group of McLane Law Firm, can be reached at 603-628-1323 or [email protected]