FLSA Topics: “On the Clock;” “Di Minimis Time;” “Rounding;” Etc.

clock.jpgThe Fair Labor Standards Act (FLSA) is full of twists and turns. Here are just a few of them:

On the Clock: With the everyday use of cellular phones, computers, emails, and text messaging, employers can find themselves facing claims for FLSA overtime wage claims for heretofore unexpected reasons. Employees performing work activities such as responding to emails, text messages and telephone may be considered “on the clock” for purposes of the FLSA.

If enough employees are involved, the consequences can be devestating to the employer. ABC News recognized the threat when it stripped all of its writers of company-issued BlackBerrys. Employees of publicly traded real-estate company CB Richard Ellis are pursuing a collective claim for OT wages for required after-hours use of their BlackBerrys.

The FLSA is clear that non-exempt employees are entitled to compensation at 1.5 times the hourly rate for all time over 40 worked in a week. Two exceptions:

De Minimis Time: Not all time non-exempt employees work over 40 in a week is compensable at 1.5 times the normal rate. The exception is for de minimis time.

The Department of Labor describes this time as being a few seconds or minutes duration beyond the scheduled time. The various appellate courts do not hold a uniform view, keeping the door open to litigation. The US Court of Appeals, Federal Circuit, in Carlsen v. United States, 521 F.3d 1371 (Fed. Cir. 2008), suggested that 10 minutes was the cutoff. The Ninth Circuit Court of Appeals rejected the idea of time alone being the determining factor for whether an activity is de minimis. In Lindow v. United States, 738 F.2d 1057 (9th Cir. 1984), it established three considerations: “(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.” Id. at 1063.

Rounding: Another exception to the FLSA’s 40-hour rule. It is outlined in 29 C.F.R. 785.48(b) as follows:

(b) “Rounding” practices. It has been found that in some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees’ starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work. For enforcement purposes this practice of computing working time will be accepted, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.

Courts will accept this standard as long as it works out equally to both sides in the long run. Rounding after seven minutes has been rejected by most courts.

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