Managing the Compensable Workday in a New Electronic World

Since that time, however, the confines of both the workday and the workplace have changed. Under the FLSA, employees are entitled to be paid beginning only with their first “principal activity,” that is, the first activity that the employee is hired to perform, and to be paid only through their last principal activity. However, those concepts do not necessarily include everything an employee might do to get ready for work at the beginning of the day, or that they may do after the traditional or scheduled workday has ended. Time can be spent turning on, booting up, and opening certain computer programs needed to perform an employee's duties. Employees may have to print out and read certain reports. They may have to check in with security or go through other screening processes just to be able to get to a work station to perform their jobs. At or after the end of the scheduled workday, an employee may need time to log off from a computer or may choose to check e-mails.

What Is 'Work'?

Recognizing these realities, employees have sought clarification in the courts as to what it means to “work” ' arguing that beyond the things their employers had hired them to perform from the beginning to the end of the workday, there were certain additional tasks they had to complete in order to perform these principal activities and that they should be paid as well for the time spent doing them. Their efforts have led to a major expansion of the concept of “work,” to encompass not only the principal activities themselves, but also activities that are “integral” and “indispensable” to the principal activities.

When Does the Day Begin And End?

To this day, however, the boundaries of this additional “work” remain murky, and efforts to define them in the courts have met with limited success. The important point, however, is that if an employee can persuade a court to call, for example, a particular morning task “integral” and “indispensable,” that activity can become the first principal activity of the day. For compensation purposes, the employee then is on the clock ' and is required to be paid ' for all of his or her work time from that moment forward. The same dynamic occurs from the end of the traditional workday until the completion of any alleged last principal activity.

Thus, a meat cutter in a slaughterhouse was originally thought to be entitled to payment only beginning with the time he or she reached the butcher table, poised to begin carving the first side of beef, until courts decided that the job could not be done with a dull knife. In a blink, sharpening knives became the first principal activity of the day and the meat cutter was entitled to be paid not only for the time spent with the sharpening stone, but also for all of the intervening time from the grinding room to the refrigerator to the butcher table, including interim walking time where the butcher was not performing duties precisely defined as “butchering,” but walking from place to place.

Needless to say, this created a problem for employers, but a reasonably containable one. Although considerable uncertainty existed (and continues to exist today) over what activities qualify as “integral” and “indispensable,” at least all of the activities occurred in the workplace, so employers could conceivably observe and monitor what their employees did and how long it took.

Technology Expands the Workday

What happens, however, when the workplace itself is no longer contained within the four walls of an office or plant? What happens to the compensable workday in what we'll call the “BlackBerry Age”? For many years now, employees have been permitted ' and in some cases required ' to work without being physically present in their places of employment. Technology has driven this expansion of the workplace to include homes, cars, hotel rooms, airplanes ' virtually any place that is cell phone' laptop' or BlackBerry'accessible. This has been both a convenience and a productivity enhancement for employers and employees. But these technological advances have profound implications for what constitutes the compensable workday.

Take, for example, an employee who brings his or her laptop home, and there performs some extra work. That employee may be entitled to be paid not only for the few minutes actually spent editing a document or reading e-mails at night before he or she sits down to dinner or goes to bed, but also for all of the intervening time from the minute the employee left the office until he or she reaches home, turns on the computer there and finishes checking her document or e-mails. The employee could argue an entitlement for this time even if his or her employer did not ask that any extra outside work be done. Remember, the compensable workday runs from the first principal activity of the day to the last principal activity. It does not start and stop to account for intervening downtime, such as commuting.

Take, for another example, an employee who pulls out his or her BlackBerry first thing in the morning to read and respond to e-mails. At first blush, this might sound like only a good thing for an employer, blessed to have such a diligent and fastidious employee. But wait! That employee may also be found to be performing an “integral” and “indispensable” part of his or her job by checking messages, which effectively starts his or her day for compensation purposes, long before he or she even reaches the office. The employer also now has an electronic record of all the time that is spent, beginning with the employer's electronic record of the BlackBerry login. So, this diligence comes at a high price.

Controlling Exposure

Because changes in technology have made it easy for employees to extend their workdays well beyond the hours indicated by the time clock at the plant or the office ' and thus more difficult for employers to monitor and control ' employers now have to manage the use of technology carefully to avoid potentially crushing exposure to overtime claims for hours worked outside of the traditional compensable workday, and outside of the traditional workplace. There are steps an employer can take to control and limit this exposure.

First, employers should establish a policy to limit the distribution of technology. Remote work devices (BlackBerrys, cell phones, laptops) could be issued only to exempt personnel, who are not entitled to overtime pay, and only as needed. If nonexempt personnel need short-term access to company technology off-site, a company can require that they acknowledge, preferably in writing via an acknowledgement form, that these tools may not be used outside scheduled work hours (except at the direction of a supervisor), that they must record and report all time spent performing off-site business activities, and that they will be required to return their electronic devices when the work is complete.

Second, employers should encourage nonexempt employees to adopt practices that keep work at the workplace. Encourage employees to go home and rest, not work. Establish limits for time that can be spent checking emails and voicemails during non-work hours. Consider refusing remote access to e-mail for nonexempt employees altogether. The policy's goal is to make sure that only those nonexempt employees who have to work off-site are given access to work-related technology and that they use it no more than is necessary.

Third, employers need to monitor compliance with any company policies limiting the use of remote work devices. Consider requiring nonexempt employees who use remote devices to sign an annual acknowledgement form signifying their understanding of the policy. Employers can also audit or sample e-mail and voicemail logins and other records of employee time spent using remote electronic devices and compare these records to pay records to ensure that all compensable time is being paid. Employers should also make sure that managers have a firm grasp of all of the policies as well. Require managers to confirm in writing that they have no knowledge of uncompensated off-site work performed by nonexempt employees, train them not to encourage and not to ignore such work, and discipline those managers who permit it.

Conclusion

Perhaps the most important thing an employer can do to avoid exposure to overtime claims is not to assume it can accept the benefits of work performed off-site, even if it was done without permission and/or in violation of company policy. If a nonexempt employee works out of the office, pay him or her. Then enforce any rules against such work with disciplinary measures.

Christopher A. Parlo is a partner in Morgan Lewis's Labor and Employment Practice. He represents and counsels management clients in a broad spectrum of industries and in all aspects of labor and employment law. Michael J. Puma is a partner in the firm's Employment Practice. His practice includes the full spectrum of labor and employment law matters.

The Fair Labor Standards Act (FLSA) requires employers to pay their employees a minimum wage for all hours worked in a workweek and to pay overtime to those nonexempt (i.e., hourly) employees in any workweek that exceeds 40 hours. All time from an employee's first principal activity of the day until the last principal activity, excluding meal periods, is compensable.

History

When Congress passed the FLSA in 1938, measuring (and controlling) the length of an employee's workday was relatively easy. An employee showed up to work, punched a time-clock (or signed a log sheet, or followed some similar method), recorded his or her departure from the worksite in the same manner as used on arrival, and was paid for the intervening time period, excluding only the generally preset lunch period. The routine seemed simple enough.

Since that time, however, the confines of both the workday and the workplace have changed. Under the FLSA, employees are entitled to be paid beginning only with their first “principal activity,” that is, the first activity that the employee is hired to perform, and to be paid only through their last principal activity. However, those concepts do not necessarily include everything an employee might do to get ready for work at the beginning of the day, or that they may do after the traditional or scheduled workday has ended. Time can be spent turning on, booting up, and opening certain computer programs needed to perform an employee's duties. Employees may have to print out and read certain reports. They may have to check in with security or go through other screening processes just to be able to get to a work station to perform their jobs. At or after the end of the scheduled workday, an employee may need time to log off from a computer or may choose to check e-mails.

What Is 'Work'?

Recognizing these realities, employees have sought clarification in the courts as to what it means to “work” ' arguing that beyond the things their employers had hired them to perform from the beginning to the end of the workday, there were certain additional tasks they had to complete in order to perform these principal activities and that they should be paid as well for the time spent doing them. Their efforts have led to a major expansion of the concept of “work,” to encompass not only the principal activities themselves, but also activities that are “integral” and “indispensable” to the principal activities.

When Does the Day Begin And End?

To this day, however, the boundaries of this additional “work” remain murky, and efforts to define them in the courts have met with limited success. The important point, however, is that if an employee can persuade a court to call, for example, a particular morning task “integral” and “indispensable,” that activity can become the first principal activity of the day. For compensation purposes, the employee then is on the clock ' and is required to be paid ' for all of his or her work time from that moment forward. The same dynamic occurs from the end of the traditional workday until the completion of any alleged last principal activity.

Thus, a meat cutter in a slaughterhouse was originally thought to be entitled to payment only beginning with the time he or she reached the butcher table, poised to begin carving the first side of beef, until courts decided that the job could not be done with a dull knife. In a blink, sharpening knives became the first principal activity of the day and the meat cutter was entitled to be paid not only for the time spent with the sharpening stone, but also for all of the intervening time from the grinding room to the refrigerator to the butcher table, including interim walking time where the butcher was not performing duties precisely defined as “butchering,” but walking from place to place.

Needless to say, this created a problem for employers, but a reasonably containable one. Although considerable uncertainty existed (and continues to exist today) over what activities qualify as “integral” and “indispensable,” at least all of the activities occurred in the workplace, so employers could conceivably observe and monitor what their employees did and how long it took.

Technology Expands the Workday

What happens, however, when the workplace itself is no longer contained within the four walls of an office or plant? What happens to the compensable workday in what we'll call the “BlackBerry Age”? For many years now, employees have been permitted ' and in some cases required ' to work without being physically present in their places of employment. Technology has driven this expansion of the workplace to include homes, cars, hotel rooms, airplanes ' virtually any place that is cell phone' laptop' or BlackBerry'accessible. This has been both a convenience and a productivity enhancement for employers and employees. But these technological advances have profound implications for what constitutes the compensable workday.

Take, for example, an employee who brings his or her laptop home, and there performs some extra work. That employee may be entitled to be paid not only for the few minutes actually spent editing a document or reading e-mails at night before he or she sits down to dinner or goes to bed, but also for all of the intervening time from the minute the employee left the office until he or she reaches home, turns on the computer there and finishes checking her document or e-mails. The employee could argue an entitlement for this time even if his or her employer did not ask that any extra outside work be done. Remember, the compensable workday runs from the first principal activity of the day to the last principal activity. It does not start and stop to account for intervening downtime, such as commuting.

Take, for another example, an employee who pulls out his or her BlackBerry first thing in the morning to read and respond to e-mails. At first blush, this might sound like only a good thing for an employer, blessed to have such a diligent and fastidious employee. But wait! That employee may also be found to be performing an “integral” and “indispensable” part of his or her job by checking messages, which effectively starts his or her day for compensation purposes, long before he or she even reaches the office. The employer also now has an electronic record of all the time that is spent, beginning with the employer's electronic record of the BlackBerry login. So, this diligence comes at a high price.

Controlling Exposure

Because changes in technology have made it easy for employees to extend their workdays well beyond the hours indicated by the time clock at the plant or the office ' and thus more difficult for employers to monitor and control ' employers now have to manage the use of technology carefully to avoid potentially crushing exposure to overtime claims for hours worked outside of the traditional compensable workday, and outside of the traditional workplace. There are steps an employer can take to control and limit this exposure.

First, employers should establish a policy to limit the distribution of technology. Remote work devices (BlackBerrys, cell phones, laptops) could be issued only to exempt personnel, who are not entitled to overtime pay, and only as needed. If nonexempt personnel need short-term access to company technology off-site, a company can require that they acknowledge, preferably in writing via an acknowledgement form, that these tools may not be used outside scheduled work hours (except at the direction of a supervisor), that they must record and report all time spent performing off-site business activities, and that they will be required to return their electronic devices when the work is complete.

Second, employers should encourage nonexempt employees to adopt practices that keep work at the workplace. Encourage employees to go home and rest, not work. Establish limits for time that can be spent checking emails and voicemails during non-work hours. Consider refusing remote access to e-mail for nonexempt employees altogether. The policy's goal is to make sure that only those nonexempt employees who have to work off-site are given access to work-related technology and that they use it no more than is necessary.

Third, employers need to monitor compliance with any company policies limiting the use of remote work devices. Consider requiring nonexempt employees who use remote devices to sign an annual acknowledgement form signifying their understanding of the policy. Employers can also audit or sample e-mail and voicemail logins and other records of employee time spent using remote electronic devices and compare these records to pay records to ensure that all compensable time is being paid. Employers should also make sure that managers have a firm grasp of all of the policies as well. Require managers to confirm in writing that they have no knowledge of uncompensated off-site work performed by nonexempt employees, train them not to encourage and not to ignore such work, and discipline those managers who permit it.

Conclusion

Perhaps the most important thing an employer can do to avoid exposure to overtime claims is not to assume it can accept the benefits of work performed off-site, even if it was done without permission and/or in violation of company policy. If a nonexempt employee works out of the office, pay him or her. Then enforce any rules against such work with disciplinary measures.

Christopher A. Parlo is a partner in Morgan Lewis's Labor and Employment Practice. He represents and counsels management clients in a broad spectrum of industries and in all aspects of labor and employment law. Michael J. Puma is a partner in the firm's Employment Practice. His practice includes the full spectrum of labor and employment law matters.