Hours Worked and Related Pay Obligations

Thursday, February 13, 2014 Hours Worked and Related Pay Obligations

Presented by: Brian Dixon Co-Chair, Wage and Hour Practice Group Littler Mendelson, P.C. BDixon@littler.com 415.677.3194

Please Note: Descriptions of these federal and state laws are summaries and should not be relied upon at face value without considering the text of the statutes and/or speaking with an attorney.

Agenda • What is work time? • Limited general concepts, state variations, “cookbook” approach under each law • What pay obligations flow from work time? • Meal and rest periods • Days of rest • Reporting pay, split shift premiums

What is “Work”? • The FLSA does not include a definition of “work”

Continuous Work Day – Federal Law • Employees must be paid for all hours within a workday, from the first principal activity to the last principal activity • A “principal activity” includes any activity that is an integral and indispensable part of an employee's work • In general, “work” includes all the time an employee must be on duty, on the employer’s premises, or at any other prescribed place of work

Work “Suffered or Permitted” • All work “suffered or permitted” by the employer must be compensated, including: • Work requested or required by the employer • Work not requested, but permitted • Work the employer knows or has reason to believe is being performed – even if not expressly requested

Key Concepts • Work is broadly interpreted to the employee’s benefit • Employees must be paid from “whistle to whistle,” with limited exception • Work includes any time the employee is required, requested, suffered or permitted to work • It is the duty of management to see that work not required or requested is not performed

Analysis of Working Time: Book-Ending the Day • What time did the employee perform the first principal work activity? • Is the employee performing work remotely? • Is remote work being captured in timekeeping system? • Is travel time being captured? • What time did the employee perform the last principal work activity? • Is the employee working from home at night?

Is the Activity Work Time? • Meal & Rest Breaks • Waiting Time • On-Call Time • Training/Meeting Time • Travel Time • Pre- and Post-Shift Activities • Sleep Time • Grievances, Suggestion Systems and Charitable Activities

Meal & Rest Breaks • A meal period may be unpaid if 30 minutes or longer and the employee is completely relieved of duties • An employer may require an employee to remain at the worksite during a meal or rest break without making the meal period into work time under federal law • A rest period of 20 minutes or less is compensable work time

On-Call Time • On-call time is compensable if an employee is unable to use the time effectively for his/her own purposes • Required to stay on or close to the employer’s premises • Responds to calls frequently • Short required response time • Any other limitations on employee’s use of his or her time • Any practice which limits the burden of being on call • On-call time is not work merely because the employee is required to carry a pager, cell phone or leave a telephone number where s/he can be reached

Waiting Time • Employees must be paid for time spent “engaged to be waiting” • Employees “waiting to be engaged” are not working

Training/Meeting Time • Training/meeting time is compensable work hours unless all four of the following requirements are met: • Attendance is outside regular working hours • Attendance is voluntary • The training/meeting is not job related • The employee does not perform any productive work during the training/meeting

Travel Time - FLSA • Not Compensable • Normal home-to-work commuting, unless employee begins work prior to commuting • Overnight travel, if outside the employee’s normal work hours (on a work or non-work day) • Compensable • Travel between job sites during the work day • Travel to another city for special one-day assignments (minus normal commute time) • Overnight travel during the employee’s normal work hours (on a work or non-work day)

Travel Time • Some states laws require all travel time to be paid except the normal commute • Travel time can be paid at a different lower wage rate (e.g. at the minimum wage), if that rate applies to all travel

Travel in Company Vehicle - ECFA • Home-to-work travel in a company vehicle, and any activities “incidental” to such travel is not work time where: • Use of vehicle is voluntary • No expense is incurred by employee in use of vehicle • Vehicle is of a type ordinarily used for commuting • Work sites are within normal commute distance of employer's office

Pre- and Post-Shift Activities • Not work: • Commuting • Walking from the parking lot to the work station • Waiting to punch a time clock • Work: • Booting up and turning off the computer • Reading emails • Shift-change conversations • Donning/doffing

“Donning and Doffing” • Compensable: • If putting on and taking off clothing or protective gear on the employer’s premises is required by law, the employer, or the nature of the work • Waiting in line for uniform • Walking after obtaining the uniform to the place where employees don/doff and to the work station

“Donning and Doffing” • Not Compensable: • If employees are allowed to don/doff clothing at home, but choose to change at work • If the aggregate time spent donning, walking, waiting and doffing is de minimis

Cleaning & Maintaining Uniforms • What is a uniform? • Defined by state law • Usually includes any distinctive clothing that an employee would not wear on a non-work day • Uniform: a shirt with a company logo • Not a uniform: khaki pants with a blue shirt • Employees may be working if required to clean or repair a uniform beyond normal washing and drying

Suggestion Systems, Resolving Grievances, Charitable Activities • Time spent by an employee preparing suggestions, resolving grievances and participating in charitable activities need not be compensated if: • Participating in the activity is voluntary, and • Occurs outside normal working hours

Sleep Time • Sleep time can be excluded from work time only if for employees on duty 24 hours, and the employee: • Agrees that up to 8 hours of sleep time will not be paid • Has adequate sleeping facilities • Is generally able to enjoy an uninterrupted night of sleep • Is paid for any interruption of sleep time • Is paid for the entire night if the employee gets less than five hours of sleep • Up to three, one-hour off-duty meal periods also may be unpaid

“Off-the-Clock” Red Flags • Recorded time is almost always a nice round number (e.g., 9:00 a.m., 5:30 pm) • Recorded time is almost always the same as the scheduled shift • Time records show a significant number of missed punches, adjustments to time, or other anomalous entries • Time punches/entries do not match hours worked shown on payroll records • Employees observed in the workplace before clocking in, during lunch, or after clocking out

“Rounding” Time • Rounding increment does not exceed quarter hour • Rounding operates to the benefit and burden of the employee and the employer • Schedule corresponds with the rounding increment • No employer practice undoes rounding • Round meal periods?

“De minimis time” • De minimis amounts of time need not be recorded or paid • Time may be de minimis based on: • Amount of time on any single occasion • Frequency of occurrence • Administrative difficulty in recording the time • Total amount of time at issue

Meal & Rest BreaksState Law • About 25 states require meal breaks • States with meal break requirements usually require a 30-minute break after 5 or 6 consecutive hours of work • Some states require that employees be free to leave the worksite • Less then 10 states require rest breaks • States with rest break requirements usually require a 10-minute break for each 4 hours of work

California Meal Periods • One 30-minute meal period for every five hours of work, unless • Six hours of work will complete the employee's work for the day and the employee waives the meal period • Variations by wage order for some initial meal periods and second meal periods • An on-duty meal period can be used only where: • The nature of the work truly prevents the employee from being relieved of all duties • The employee agrees in writing to work through the meal period The meal period is counted and paid as work time

California Rest Periods

Reporting Pay • Some states require employers to pay an employee for a minimum number of hours if the employee reports to work when no work is available • Paid at the employee’s regular rate • Pay the lesser of a minimum number of hours or the scheduled shift • Requirements vary by state and, within states, can vary by industry

Reporting Pay • California – 2 to 4 hours • Connecticut – 2 or 4 hours in some industries • Washington, D.C. – 4 hours • Massachusetts – 3 hours • New Hampshire – 2 hours • New Jersey – 1 hour • New York – 1 to 8 hours, depending on industry, shifts • Oregon – 1 hour to minors only • Rhode Island – 3 hours

Split-Shift Pay • Employers may be requiredto provide extra pay for employees who work a split shift in: • California • New York • Washington D.C. • Split-shift scheduling is prohibited in Hawaii • California split-shift premium: • ((Hours Worked + 1) * MW) – Wages Earned • New York split-shift premium

Split-Shift Pay • Only New York defines a split shift: • 10 hour non-work period between shifts • California, New York and D.C. all require an additional 1 hour of pay at minimum wage, but this requirement is met if: • Wages Earned > (Hours Worked + 1) * MW • If test not met, pay the difference

Day of Rest Laws • Half a dozen states haveday-of-rest laws • Many are related torecognizing a Sabbathand may have Constitutionalissues • California – an employer must provide one day’s rest out of every seven

Questions and Answers

Thursday, February 13, 2014 Thank You Brian DixonLittler, San Francisco

Hours Worked and Related Pay Obligations