Applying Wage and Hour Laws to the 21st Century Workforce

Technological advancements and flexible workplace arrangements have drastically increased the potential exposure to employers for off-the-clock work performed by non‑exempt employees.  With the number of lawsuits involving technology-related off-the-clock work claims on the rise and the federal government’s increased emphasis on investigating off-the-clock work violations, employers need to review their policies and procedures related to non-exempt employees’ ability to perform work remotely through Blackberries and other personal digital assistants (PDAs) to ensure compliance with federal and state wage and hour laws.

In this series of blog posts, we will address the following topics: (1) general wage and hour law requirements; (2) recent activities by the Department of Labor (DOL) to combat off-the-clock work violations; (3) meal breaks; (4) records of potential off-the-clock work violations; (5) telecommuting risks and rewards; and (6) issues involving exempt employees.

First and foremost, an employer must understand what constitutes “hours worked” and how the term is constantly changing with the technological advances available to businesses to help them operate more efficiently.

What Constitutes Hours Worked?

The Fair Labor Standards Act (FLSA) is one of the oldest federal laws regulating the work environment dating back to 1938. The FLSA is administered and enforced by the DOL’s Wage and Hour Division. All work that an employee is “suffered” or “permitted” to work must be compensated by the employer. Some work defined as de minimis work (a few seconds or minutes here and there that are too inconsequential to worry about) does not have to be compensated. As discussed below, the de minimis standard is generally narrowly applied.

The DOL has adopted regulations to help define what does and what does not count as hours worked. Essentially, activities that an employee performs that are for the primary benefit of the employer constitute compensable work time. Interpreting the DOL’s enforcement position, courts have historically ruled that an employer is liable for off-the-clock work if the employer knew or should have known that the employee was working.

To determine when an employee’s workday begins and ends, an employer must determine when the employee performs his or her “first principal activity.” The performance of principal activities is always compensable. Preliminary and postliminary activities are not compensable unless they are an integral and indispensable part of an employee’s principal activities. Integral and indispensable activities are those that are essential and closely related to the principal activity. For non-exempt employees, all periods of time between the commencement of the “first” principal activity and the completion of the “last” principal activity must be included in hours worked.

The DOL has applied the continuous workday rule as an enforcement position for a number of years. In 2005, the U.S. Supreme Court embraced the DOL’s interpretation in the IBP, Inc. v. Alvarez decision, stating that “consistent with our prior decisions interpreting the FLSA, the [DOL] has adopted the continuous workday rule, which means that the ‘workday’ is generally defined as ‘the period between the commencement and completion on the same workday of an employee’s principal activity or activities.’”

With today’s modern technological advances, determining when an employee’s workday begins has become increasingly more difficult. For example, are employees performing any principal activities at home before they start their commute to work? If so, is their commuting time being performed during the continuous workday and thus compensable? A number of lawsuits have been filed across the country arguing this very point. Even if an employee performs no work at home, but prior to clocking in is asked to perform compensable work at the office, has the employee’s workday begun prior to the employee clocking in?

Stay tuned for future installments of Applying Wage and Hour Laws to the 21st Century Workforce, where we will continue to discuss the role of technology in understanding and documenting hours worked and provide food for thought on how employers can stay on top of new developments in this increasingly important area of employment law.

Cynthia A. Bremer is a shareholder in the Minneapolis office of Ogletree Deakins, and Charles E. McDonald, III is a shareholder in the Greenville office of Ogletree Deakins.