June 2001
Defining ‘Hours Worked’ Under the Fair Labor Standards Act
By Jeffrey D. Pollack
The Fair Labor Standards Act (FLSA) requires employers to pay their employees for all hours worked, and to pay overtime for hours in excess of forty per week. Accordingly, understanding the definition of “hours worked” is critical to FLSA compliance. There are various statutory and regulatory sources for the definition, and several liability and remedies provisions under the FLSA.
The FLSA does not define “hours worked.” It does, however, define “employ” as “to suffer or permit to work” [29 USC section 203(g)]. Work, in turn, is “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business” [Tennessee Coal, Iron & R.R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 598 (1944)]. Against this background, it is necessary to turn to the regulations in 29 CFR Part 785, as well as the Portal-to-Portal Act (29 USC section 251 et seq.).
Employers must pay for all hours an employee works—even if the employer does not request the work. The employer bears the burden of preventing unwanted work: “mere promulgation of a rule” is insufficient; the employer must “make every effort” to enforce the rule (29 CFR section 785.13). That the employee could have completed the work in less time is no defense, nor is the employee’s failure to claim the hours.
If the employer “knows or has reason to believe” the employee is working, it must pay for the time (29 CFR section 785.11). Under appropriate circumstances, constructive knowledge will be imputed; but “[w]hile an employer must pay for [all] work it suffers or permits, an employer cannot suffer or permit an employee to perform services about which the employer knows nothing” [Holzapfel v. Town of Newburgh, 145 F.3d 516, 524 (2d Cir.), cert. denied, 525 U.S. 1055 (1998)].
Determining ‘Hours Worked’
Waiting and on-call time. The time an employee spends “waiting” may be work, depending on the circumstances. In the words of the Supreme Court, “facts may show that the employee was engaged to wait, or they may show that he waited to be engaged” [Skidmore v. Swift & Co., 323 U.S. 134, 137 (1944)].
An employee waiting for work to become available is working, even if completely inactive and even if not required to remain at the workplace, only if such periods are unpredictable, of short duration, and “the employee is unable to use the time effectively for his own purposes.… waiting is an integral part of the job” (29 CFR section 785.15). On the other hand, “periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes are not hours worked” if the employee knows in advance that he can leave the job and need not return until a specified hour (29 CFR section 785.16). The regulations give the example of a truck driver to illustrate the difference: if, after reaching her destination, the driver must stay with the truck while it is loaded and unloaded, she is working during the entire trip. If she is free to leave the truck at the location, she is not working from the time she may leave until the time she must return.
The same analysis applies to on-call time. “‘On-call’ time may, depending on the circumstances, qualify as ‘work’ under the FLSA” [Brown v. Luk, Inc., 1996 U.S. Dist. Lexis 7173 *15 (N.D.N.Y. May 10, 1996)]. If the employee must remain on the employer’s premises or “so close thereto that he cannot use the time effectively for his own purposes,” he is working. In contrast, an employee who need only be reachable by an employer is not working (29 CFR section 785.17).
Meal periods. A bona fide meal period of thirty minutes or more, during which the employee is completely relieved of duty, is not working time. To be relieved of duty, the employee need not leave the employer’s premises, as long as he is “otherwise completely freed from duties during the meal period.… The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating” (29 CFR section 785.19). For example, an office employee required to eat at her desk is working through lunch, even if she does not perform any active duties.
Lectures, meetings, and training programs. Time spent at lectures, meetings, or training programs (and similar activities) is time worked unless:
Training designed to make an employee better at the job is directly related. Training for another job or a new skill is not directly related, even if performance in the present job improves (29 C.F.R. section 785.29).
Travel time. An employee on a one-day assignment in another city is considered working while traveling to and from that city. The employee must be paid for all hours of the trip, but a bona-fide meal period may be excluded (29 CFR section 785.37). Additionally, because the employee ordinarily has to travel between home and the regular job site, the time traveling between home and the train station or airport is not working time. When an employee must stay overnight, travel time is work time “when it cuts across the employee’s workday. The employee is simply substituting travel for other duties” (29 CFR section 785.39).
Portal-to-Portal Act. Enacted in 1947 following several Supreme Court decisions that broadly interpreted the FLSA, the Portal-to-Portal Act excludes the following from the definition of hours worked:
(1) walking, riding, or traveling to or from the actual place
of performance of the principal activity or activities which such employee is
employed to perform, and
(2) activities which are preliminary to or postlimary
to said principal activity or activities, which occur either prior to the time
on any particular workday at which such employee commences, or subsequent to the
time on any particular workday at which he ceases, such principal activity or
activities. [(29 USC section 254(a); note that the Portal-to-Portal Act does not
exclude these activities from hours worked. Rather, it provides that “no employer
shall be [liable] … on account of the failure … to pay an employee minimum wages,
or … overtime compensation for or on account of” these activities.]
The net effect of the Portal-to-Portal Act is to require employers to pay only for time that benefits or is controlled by them.
The de minimus defense. Not withstanding the above discussion, small increments of time may be excludable as de minimus:
When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded.…. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved [Reich v. New York City Transit Authority, 45 F.3d 646, 652 (2d Cir. 1995)].
When reviewing a de minimus defense, courts look at: 1) the practical administrative difficulty of recording the additional time; 2) the size of the claim in the aggregate; and 3) whether the employees performed the work on a regular basis.
Liability and Remedies
An unusual feature of the FLSA is the personal liability of “any person acting directly or indirectly in the interest of an employer in relation to an employee” [29 USC section 203(d)]. Under this provision, a company’s owners, officers, managers, and supervisors can face personal liability, without the traditional need to pierce the corporate veil. The key question is whether the person “possessed the power to control the workers in question, with an eye to the ‘economic reality’ presented by the facts of each case” [Herman v. RSR Security Services Ltd., 172 F.3d 132, 139 (2d Cir. 1999)].
Individuals that violate the FLSA face liability for unpaid wages, an equal amount in liquidated damages, and attorneys’ fees. Liquidated damages are the norm, not the exception. The employer bears the burden of establishing that the violation was “in good faith,” based upon reasonable grounds for believing that the act or omission did not violate the FLSA. “The burden on the employer is a difficult one to meet, however, and double damages are the norm, single damages the exception” [Dingwall v. Friedman Fisher Assoc., P.C., 3 F. Supp.2d 215, 222 (N.D.N.Y. 1998)].
The FLSA is not a law to be taken lightly. However burdensome compliance may seem, it is far more prudent than risking liability.
Excerpted from an article that originally appeared in the New York Law Journal, April 5, 2001. Reprinted with permission. Copyright © 2001 NLP IP Co.
Editor:
Robert H. Colson, PhD, CPA
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