The best answer to last week's Quick Quiz is, "No", it is not likely that Alan's time between calls would be found to be worktime under the federal Fair Labor Standards Act.

The idle time during which an otherwise off-duty employee is available to be called upon to do something might or might not be compensable FLSA "hours worked", depending upon the situation.  Generally, the question is whether this idle time while "on call" is spent predominantly for the employer's benefit as opposed to the employee's.  The answer usually turns upon the extent to which the employee is able to use the time effectively for personal purposes.

What Are The Important Factors?

The U.S. Labor Department and the courts say that this determination requires an evaluation of all the relevant facts.  Among the things often considered are whether:

♦   The employer requires the employee to remain on the employer's premises;

♦   The employer requires the employee to wait at home for calls or messages or confines the employee to an excessively-restricted geographical area;

♦   The employee receives numerous, frequent, and/or lengthy work assignments during the on-call period;

♦   The employee must respond within a short timeframe under the circumstances (especially if the employee must travel somewhere to do the work);

♦   The employer requires the employee to be on-call frequently, never relieves the employee from on-call status, does not permit the employee to exchange calls or call periods with another worker, or does not allow the employee to turn down at least some calls;

♦   There is an agreement or understanding covering the arrangement (although an employee may not agree to anything that violates the FLSA).

Ordinarily, some combination of restrictive factors is present when idle on-call time is found to be compensable work.

But the time need not be free from any restrictions whatsoever.  For example, courts have found these periods not to be worktime even though the employer required the employee to remain sober and not to take any mind-altering drugs, or to stay well-groomed and appropriately dressed.  Neither is it necessary for the employee to be able to engage in literally any personal activity he or she might wish.

So What About Alan's Situation?

Alan is on-call only for seven days a month, and only for six hours on each on-call day.  He need only phone within 30 minutes after receiving a message, rather than physically report somewhere within that time.  He averages far less than one duty-message per on-call day and spends roughly 5% to 7% of his on-call period performing work.  Although he cannot drink alcohol and must stay in the area, these restrictions standing alone do not mean that he is unable to use the on-call time for a wide variety of personal purposes.  It is probable that a decisionmaker would not see these particular circumstances as causing Alan's idle on-call time to be FLSA "hours worked".

Of course, the predominant-benefit question is necessarily fact-specific.  Therefore, each situation should be separately evaluated.

And Don't Forget . . .

States and other jurisdictions might have "on call" rules that are tougher on employers than the FLSA is.  Employers should look at every applicable wage-hour law to find out whether this is the case.

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Alan is a Help Desk Associate for The Big Corporation.  He is subject to the federal Fair Labor Standards Act's minimum-wage, overtime, and timekeeping requirements.

Alan normally works from 8 a.m. until 4 p.m., Tuesday through Saturday.  Once each calendar month, Alan is on-call between 5 p.m. and 11 p.m. each day for a seven-day period.

He has to call-in within 30 minutes after receiving an e-mail on his cellphone.  While he is on-call, he cannot drink alcoholic beverages, and he cannot leave the metropolitan area in which he lives.  Typically, Alan receives two or three messages in a seven-day on-call period and spends about an hour dealing with each problem that prompted the e-mails he received.  He accurately records all of the time he spends handling those problems, and his employer pays him properly under the FLSA for this worktime.

But what about the remaining time for which Alan is on-call?  Is it likely that his idle time between calls will be deemed to be FLSA "hours worked"?

A recent Time magazine item by Dan Schawbel of Millennial Branding discusses what he sees as a growing trend to abandon the traditional on-premises, 9-to-5 workday in favor of permitting employees to "work odd hours, telecommute and otherwise tweak the usual 9 to 5 grind."  Schawbel says that Generation Y employees (those born between 1982 and 1993) are spearheading this because they prioritize workplace flexibility so highly.  He warns that employers who fail to offer the option to telecommute, to work atypical hours, and to use technology to facilitate alternative work patterns run the risk of turning away a group of prospective workers projected to comprise 75% of the global workforce by 2025.

Be that as it may, it is also essential to take wage-hour compliance into account in deciding how to accommodate this trend.  Under the federal Fair Labor Standards Act alone, thorny issues are presented by employees who spend less worktime on-premises in favor of working at home and elsewhere and at unpredictable times.  Complicating matters is the fact that the FLSA is in many ways an unforgiving creature of a bygone era in which workplace flexibility was largely irrelevant.

As just one illustration, an employer's responsibility to keep an accurate record of non-exempt employees' hours worked has been a challenging task even when the employees report to a single workplace and perform their duties during a normal, fixed-schedule workday.  Employers have now been hit with FLSA claims based upon the additional timekeeping difficulties posed by the advent of helter-skelter, offsite work activities made possible by computers, personal digital assistants, and other remote-access electronics.

The U.S. Labor Department is also following these trends.  We reported last May about DOL's release of a smartphone app designed to help employees "independently track the hours they work and determine the wages they are owed."  This development likely represents an increased threat of claims by tech-savvy employees who work under non-traditional circumstances.

And while employees might favor a flexible approach in the beginning, experience suggests that some will not hesitate to make wage-hour claims later when it behooves them to do so.  Employers cannot count on successfully defending against these claims simply on the basis that the workers agreed to the arrangement, or even that they sought it out.  Neither is it is likely to be a broad-based solution to "make them all exempt."

In the end, employers who move toward letting employees "tweak the 9 to 5 grind" must commit themselves to joining this with effective methods to maintain wage-hour compliance, including measures ensuring that all hours worked by non-exempt employees are accurately recorded.  Moreover, these compliance steps will not be an autopilot proposition; they will always require vigilant, hands-on management.

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Affected employers will no doubt have a variety of wage-hour questions in the aftermath of Hurricane Irene.  The number and scope of the issues raised might well be practically endless.  In this post, we address in very general ways the federal Fair Labor Standards Act topics that experience suggests will be among the most-pressing.

◊   What do we do about lost time records for work already performed but not yet paid?

If the only records of hours worked are lost or unusable, then there is no perfect solution.  Re-create the most accurate accounting you can under the circumstances.  Perhaps the preferred approach is to ask each employee to make the best-possible estimate of his or her hours worked. You should obtain the employee's written acknowledgement of his or her best recollection and should include the employee's authorization allowing later corrections in worktime and pay should more accurate hours-worked information become available.

◊   How do we track employees' worktime without our electronic/computerized time clocks?

Employees may record all hours worked by using handwritten timesheets.  To ensure accuracy, each employee should enter his or her own time and should record the actual times when the employee's work starts and stops each workday.

◊   As we recover, must we keep paying overtime on top of our other burdens?

At this time, there is no FLSA "emergency" exception that relieves the obligation to pay FLSA-required wages.  Employees subject to the FLSA's overtime provision must receive overtime premium at a rate of at least 1.5 times their regular rates of pay for all hours worked over 40 in the designated seven-day workweek.

If employees are covered by a collective bargaining agreement, it might contain additional overtime provisions requiring more than the FLSA does.  Perhaps the terms of the agreement relax those requirements in emergencies.  However, a collective bargaining agreement cannot override the FLSA's requirements.

◊   Can an employee volunteer to perform recovery services for us without pay?

The FLSA does not permit employees to "volunteer" unpaid time to the employer under any but the narrowest of circumstances.  For example, if a manufacturing facility sets up a hotline or makes other arrangements to provide a clearinghouse for information about the status of the workplace and employee reporting times, non-exempt employees volunteering to perform such services are engaged in compensable hours worked for FLSA purposes.  Employers considering any kind of unpaid "volunteer" services by their employees should evaluate the legality of doing this carefully and in advance.

◊   Must we keep paying employees who are not working?

Under the FLSA, for the most part the answer is "no".  FLSA minimum-wage and overtime requirements attach to hours worked, so employees who are not working are typically not entitled to the wages the FLSA requires.

One possible FLSA-related exception is for employees treated as FLSA-exempt whose exempt status requires that they be paid on a "salary basis".  Generally speaking, if such an employee performs at least some work in the designated seven-day workweek, the "salary basis" rules require that he or she be paid the entire salary for that particular workweek.  There can be exceptions here, too, such as might sometimes be the case where the employer is open for business but the employee decides to stay home for the day.

Also, non-exempt employees paid on a "fluctuating-workweek" basis under the FLSA normally must be paid their full fluctuating-workweek salaries for every workweek in which they perform any work.  There are a few exceptions, but these are even more-limited than the ones for exempt "salary basis" employees.

Of course, an employer might have a legal obligation to keep paying employees because of, for instance, an employment contract, a collective bargaining contract, or some policy or practice that is enforceable as a contract or under a state wage law.

◊   What can we do about charging missed time to vacation and leave balances?

The FLSA generally does not regulate the accumulation and use of vacation and leave.  The "salary basis" requirements for certain FLSA-exempt employees can implicate time-off allotments under various circumstances, some guidance on which the U.S. Labor Department has provided in opinion letters accessible here and here.

Again, however, what an employer may, must, or cannot do where paid leave is concerned might be affected by an employment contract, a collective bargaining contract, or some policy or practice that is enforceable as a contract or under a state wage law.

◊   When is travel time "hours worked" for purposes of computing FLSA wages due?

FLSA travel-time "rules" are not seamless, up-to-date, or necessarily logical or consistent with common sense.  The best-known ones are that:

•   Normal commuting between home and work typically is not considered to be hours worked, and

•   Travel between one assignment and another during a workday typically is hours worked.

However, even these principles are subject to exceptions and elaboration.  The best starting point is to consider each scenario an employer faces under the U.S. Labor Department's basic interpretations on travel time.  They are compiled at 29 C.F.R. §§ 785.33-785.41 and may be accessed here.

________________

Remember that other requirements, such as those applying to government contractors or subcontractors and those of states or other jurisdictions, can also be relevant to these questions.

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Our earlier post about the U.S. Labor Department's position on unauthorized extensions of rest breaks has generated additional comments and questions.   We have responded to one comment at length beneath the post itself.

Another reader took the Labor Department's interpretation to mean that, if an employee impermissibly extends his or her rest break, then the whole rest break could be treated as non-compensable time under the federal Fair Labor Standards Act.  In that reader's view, for example, if an employee stretches a ten-minute rest break to 20 minutes, then the full 20-minute period could be excluded from worktime, rather than only the additional ten minutes.

The Labor Department has said that this is not the case.  In Opinion Letter of Wage-Hour Acting Administrator FLSA2001-16 (May 19, 2001), an employer asked the U.S. Wage and Hour Division whether an employee's unauthorized extension of a rest break under the conditions in Section 31a01(c), Field Operations Handbook (U.S. Labor Department, December 15, 2000), allowed the exclusion of the entire rest break from compensable time.  According to the Acting Administrator, "[o]nly the length of the unauthorized extension of an authorized break will not be considered hours worked when the three conditions are met, not the entire break."  In our illustration, then, the Labor Department would say that only the additional ten minutes could be treated as non-compensable time.

It also appears that some readers were not distinguishing among different kinds of breaks.  For purposes of what is and is not FLSA worktime under Labor Department interpretations, it can be useful to view scheduled breaks as falling into essentially three categories:

◊   Bona fide meal breaks, which are typically noncompensable time (29 C.F.R. § 785.19);

◊   "Short" rest breaks of "about 20 minutes" or less, which the Labor Department says are typically compensable time (29 C.F.R. § 785.18); and

◊   Break periods which are neither meal breaks nor "short" rest breaks, which might or might not be compensable time  (Section 31a01(b), Field Operations Handbook (U.S. Labor Department, December 15, 2000), link to reproduction below).

Employers should evaluate these categories differently in deciding whether and to what extent to treat them as being compensable hours worked under the FLSA.

And once again, employers must also be aware of and comply with whatever are the applicable break obligations of a state or another jurisdiction.

FOH 31a01b 12 15 00.pdf (34.71 kb)

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Acme Corporation's longstanding policy is to give non-exempt employees two 10-minute rest breaks each workday.  It treats these breaks as paid worktime.  Management recently realized that, over the years, most of the employees have gradually come to be spending 15 to 20 minutes or even a little longer on each break.  Acme sent out a memo reminding everyone that the breaks are limited to 10 minutes, but it had no effect.  Could Acme start considering the over-10-minute extensions to be unpaid time?

The U.S. Labor Department has said that this is permitted under the federal Fair Labor Standards Act, if an employer makes its intentions clear in advance.

The FLSA does not require employers to give rest breaks (which should be distinguished from lactation breaks, which are required).  Many employers do give rest breaks, of course, and the Labor Department's position is that short periods like this (typically running from five to about 20 minutes) count as worktime for employees who are subject to the FLSA's minimum-wage and/or overtime requirements.  In the Labor Department's view, such breaks mainly have the effect of promoting employee efficiency, so they cannot be deducted from or offset against other compensable time.

Consequently, many employers assume that, when an employee stretches a ten-minute break to 20 minutes, the FLSA does not allow the additional ten minutes to be treated as non-compensable time.  On the contrary, the Labor Department's internal enforcement manual takes the position that unauthorized break extensions need not be considered worktime, so long as the employer has expressly and unambiguously told employees that:

◊   Authorized breaks may last only for a specific length of time;

◊   Any extension of those breaks is against the rules; and

◊   Any extension of those breaks will be punished.

Section 31a01(c), Field Operations Handbook (U.S. Labor Department, December 15, 2000)(link to reproduction below).

Any employer looking to rely upon this position in the future would be well-advised to adopt a written break policy that includes these points and makes clear that unauthorized extensions will not be counted as worktime.  It should also be able to show that employees are aware of the policy.

Remember that many states impose rest-break rules of their own.  Employers must also be aware of and comply with whatever the applicable obligations are.  A state need not follow FLSA interpretations with respect to breaks, including as to whether unauthorized extensions of breaks are or are not to be counted as worktime under the state's own break requirements or under its other laws relating to hours worked.

 FOH 31a01 12 15 00.pdf (27.36 kb)

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Many compensation policies and similar documents refer to wages for non-exempt employees in the context of a "week", a "pay week", a "pay period", "the schedule", an "overtime week", or some other ambiguous word or phrase.  But the timeframe that matters under the federal Fair Labor Standards Act is a term-of-art:  A "workweek".  For instance, with few exceptions, FLSA overtime pay is due for a non-exempt employee's hours worked over 40 in a single workweek, which is not necessarily the same thing as the calendar week or an employee's scheduled week or pay period.

An FLSA workweek is a fixed, regularly-recurring period of 168 hours – that is, seven, consecutive, 24-hour periods – that the employer expressly adopts in order to maintain FLSA compliance.  FLSA recordkeeping regulations require covered employers to select and document at least one such workweek.  The workweek can be set to begin on any calendar day and at any time of day, but thereafter the employer must apply that workweek in complying with the FLSA.

If an employer has not designated and documented a workweek, or if it computes pay based upon some timeframe other than the applicable workweek, this can lead to non-compliance.  As an illustration, for the overwhelming majority of employees whose overtime must be determined on a workweek basis, the FLSA's requirements are not satisfied by paying overtime based just upon the number of hours worked over 80 in a two-week period or upon worktime exceeding 86.67 hours in a semi-monthly period.

What the workweek is can also affect what pay is due to an employee who must be paid on a "salary basis" in order to qualify for a particular FLSA exemption.  For example, the FLSA "salary basis" exemption principles say that the salary need not be paid for any workweek in which the employee performs no work.  However, to decide whether these are the circumstances, one has to know what workweek applies to that employee in the first place.

An employer is permitted to have more than one workweek under the FLSA, and the workweek does not have to be the same for every group of employees or for every location.  It is possible to establish different FLSA workweeks for different groups, for different locations, or even for different people.  Variations in work patterns or tendencies in different workforce segments can sometimes mean that it is advantageous to adopt a different workweek for a particular group or location, or even for a few particular employees.

It is possible to change a workweek, of course.  But an employer may neither do this frequently nor otherwise manipulate the workweek so as to produce a purported series of non-overtime workweeks.  Once the workweek has been established, it remains fixed regardless of the employees' schedules or numbers of hours worked.

Employers should also check into any applicable laws of a state or other jurisdiction to see whether there are any workweek-related requirements or restrictions that are different from or tougher than the FLSA's.

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We previously reported on DOL's publication of a "Work Hours Calendar", a timesheet for employees to use to keep a private record of each workday’s arrival, start, stop, and departure times, along with other information.  In related comments, DOL told employees that "it is recommended that you keep your own records of all the hours you work and your pay."

In a news release this week, DOL cites that publication and goes a step further by announcing the launch of DOL's "first application for smartphones, a timesheet to help employees independently track the hours they work and determine the wages they are owed."  The free app is currently compatible with the iPhone and the iPod Touch.  DOL will explore making it available on other smartphone platforms.

Describing the new phone app, DOL's news release says:  "[U]sers conveniently can track regular work hours, break time and any overtime hours for one or more employers. This new technology is significant because, instead of relying on their employers' records, workers now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records."  (emphasis added).

According to reports, DOL has stated:  "The app also will enable users to add comments to the information; view a summary of their work hours in a daily, weekly, and monthly format; and e-mail the summary of work hours and gross pay as an attachment."  The "DOL-Timesheet" app allows employees to keep their own time records and e-mail themselves reports that they can print from their computer.  It also offers one-tap e-mail access to DOL and a link to regional DOL offices.

Once again, DOL is encouraging employees to keep what amounts to a separate set of books.  There is great potential here for needless mistakes or misunderstandings, or even for outright mischief on the part of some.  For example, most employees have no expertise in what is and is not FLSA worktime, and it is likely that "conventional wisdom" will lead many to record time in this app that does not count as compensable FLSA "hours worked".

As we noted in our previous post, employers are well-advised to be sure they can demonstrate that their records are the best accounts of all facts relevant to compliance with the FLSA and similar laws.  Among other things, employers should consider communicating explicitly to employees and managers the importance of accuracy in the employer's time records; requiring employees to report any hours-worked questions, discrepancies, or disagreements immediately; reviewing company time records on a regular basis for accuracy; correcting mistakes in the time records (with the employee's acknowledgement of the correction); and other measures designed to make the employer's records accurate and the most credible version that exists. 

Of course, employers must also educate themselves on what time must be counted as "hours worked"under the FLSA (including, but not limited to, compensable travel time) so that all such time is properly captured in the employer's records.

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The U.S. Labor Department's most-recent regulatory agenda now targets April 2011 for the release of a proposed rule that DOL says is intended to, among other things, "update [federal Fair Labor Standards Act] recordkeeping requirements to foster more openness and transparency in demonstrating employers' compliance with applicable requirements to their workers, to better ensure compliance by regulated entities, and to assist in enforcement."  Elsewhere, DOL has stated that this forthcoming "Right To Know Under The Fair Labor Standards Act" would address "notification of workers' status as employees or some other status such as independent contractors, and whether that worker is entitled to the protections of the FLSA."  The proposal would "also explore requiring employers to provide a wage statement each pay period to their employees," apparently so as to convey to employees "how their pay is computed."

These current notifications include even fewer specifics than their predecessors, about which we reported in May.  At that time, DOL expressed an intention to require employers to notify workers of their FLSA rights in some unidentified way and to provide unspecified "information" about hours worked and wage computations.
 
DOL also said earlier that employers would be required to prepare some sort of "classification analysis" for a worker whom the employer will "exclude . . . from the FLSA's coverage," to disclose this analysis to the worker, and to provide the analysis to a DOL investigator upon "request."  Judging from the latest notices, this is still on the table.  It is less than transparent whether such an analysis would be restricted to situations in which a worker is categorized as being or not being an employee for FLSA purposes.  For example, there is concern that it will also extend to an employer's decisions about which employees it will treat as being exempt from the FLSA's pay requirements.  At a May "Stakeholder Forum" in Washington, D.C., DOL officials declined to address this question.

We continue to recommend that employers remain on the alert for this proposed rule.  When it is published, employers should evaluate each provision in detail, should carefully consider all potential ramifications, and should be prepared to submit suggestions, comments, and any objections.  In light of the recent "Bridge to Justice" initiative, there is every reason to anticipate that information compiled under the requirements of any final regulation will wind up in the hands of claimants and their lawyers.

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Tucked away in a recent U.S. Labor Department e-newsletter was the announcement of a new "Work Hours Calendar."  It is a time-tracking document that the Wage and Hour Division urges workers to maintain separately from the employer's official records.  According to the newsletter:

[The] Work Hours Calendar in English and Spanish has been developed to help workers make sure they are properly paid at the end of the work week.  The calendar helps workers track their rate of pay, when they start and stop working, and arrival and departure times.  This information would prove invaluable during an investigation where an employer has failed to maintain accurate employment records.  Designed for use by those who are the most vulnerable workers in the country, the calendar includes easy-to-understand information about worker rights and how to file a wage violation complaint.  The calendar can be ordered by calling 1-866-4US-WAGE (866-487-9243).

[Emphasis added].

Regulations already require employers to keep accurate records of all hours worked by non-exempt employees.  Nevertheless, DOL's Calendar tells workers:

[I]t is recommended that you keep your own records of all the hours you work and of your pay.  It is recommended that you keep all your pay stubs, information your employer gives you or tells you about your pay rate, how many hours you worked, including overtime, and other information on your employer’s pay practices. This work hours calendar should help you keep as much information as possible.

[Emphasis added].

The Calendar not only contains spaces for each workday's "start" and "stop" times but also calls for recording the employee's "arrive" and "leave" times for the day.  We anticipate that this information might be used by DOL in an investigation to examine whether, for example, any compensable work was allegedly performed after the "arrival" time but before the "start" time, and whether the employer properly counted and compensated such time as hours worked, particularly when it comes to any overtime pay due for the workweek.

Despite its otherwise-detailed nature, the Calendar includes nothing calling for the employee to certify, attest, or so much as even acknowledge that the information written on it is accurate and correct.

The Calendar concludes by saying that workers have "the right to be paid fairly," and that "[i]t is a serious problem when workers in this country are not being paid every cent they earn."  As we have said in connection with DOL's We Can Help initiative, statements like this might well lead to employee dissatisfaction about things having nothing to do with any law DOL enforces.  There are of course other compelling reasons to pay employees "fairly" and to be sure they receive "every cent they earn", but federal wage-hour laws impose no such obligations.

Given today's supercharged wage-hour litigation environment, and in light of this not-so-subtle urging that employees create an alternate set of records, employers are well-advised to be sure they can demonstrate that their records are the best accounts of all facts relevant to compliance with the federal Fair Labor Standards Act and similar laws.