BOSTON // HARTFORD // NEW YORK // NEWARK // STAMFORD // PHILADELPHIA // WILMINGTON

Recording, Defining and

Counting Hours Worked

CBIA Seminar

♦ Whether time is compensable is fundamental

to:

– Minimum wage compliance

– Overtime calculation

– Compliance with recordkeeping obligations

– The company’s bottom line

♦ The rules are complicated

– Federal and state rules

may differ

♦ Technology is blurring the

line between when

workers are on-duty and

off-duty

♦ The stakes are high

♦ Enforcement activities by federal and state

agencies is at an all time high and penalties

are significant

– Civil money penalty

CT - $300 per violation

Federal - up to $1,100 per violation for Repeat

or willful minimum wage or overtime pay

violations

– Referral to Attorney General for Prosecution

♦ The stakes are high

– October 2012 – KFC paid $3.55 million to settle

off-the-clock claims involving workers alleging they

performed store-closing functions for which they

were not paid

♦ The stakes are high

– July 2012 – A Xerox subsidiary paid $4.5 million to

settle off-the-clock claims involving the few

minutes call center workers spent each day

logging on to their computers

– December 2009 – Walmart paid $40 Million to

settle off-the-clock wage claims

New DOL App Helps Workers Keep Track

“This is a timesheet to

record the hours that you

work and calculate the

amount you may be owed

by your employer….”

Hours Worked – Key Principles

♦ Hours worked includes all work that the employer

“suffers or permits”

– Even if the work is not requested or authorized

– Includes work performed away from the usual

workplace

Factors to consider: Was the work

1. Required by the employer,

2. Pursued necessarily and primarily for the

employer's benefit, and

3. An integral and indispensable part of the

employee's work8

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Hours Worked – Key Principles

♦ Continuous Work Day Rule:

– Employers must pay for all working time within

the workday, from the employee's first principal

activity to the employee's last principal activity

Principle Activity

♦ Any activity that is an integral and indispensable part

of an employee's work

– Putting on and taking off protective gear

– Walking from the area where an employee performs

one principal activity (putting on protection gear) to

another area where employee performs another

principal activity

– Morning staff meeting

– Checking e-mails at home (?)

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Work Time Excludes

“Non-work” time!

♦ Non-work time includes

– Holidays, sick days, vacations, other days off

whether paid or unpaid

– Only certain breaks (discussed below)

COMMON PROBLEMS IN

DETERMINING HOURS WORKED

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Preliminary and Postliminary Activities

♦ Activities not integral and

indispensable

– Commuting to work

– Changing clothes (under

certain circumstances)

– Storing personal belongings

in a locker provided for the

benefit of workers

– Punching in/out, including

waiting in line to do so

Rest and Meal Periods

♦ Meal Periods

– Need not be compensable

Sufficient time to eat a

regular meal – generally 30

minutes

The employee must be

completely relieved of all

work duties (active or

passive)

• without interruptions

The employer need not

permit employees to leave

the premises

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Rest and Meal Periods

♦ Meal Periods

– Under Connecticut law –

Employers must grant a 30

minute meal period to

employees working at least

7.5 consecutive hours

Exception: not required if

employees receive thirty or more

total minutes of paid rest or meal

periods

– Law allows employers to

exclude “meal periods” from

hours worked. Same as

federal.

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Travel Time

♦ Not Hours Worked

– Generally, normal home-

to-work commuting,

except if employee

begins working at home

prior to commuting

– Overnight travel, if

outside the employee’s

normal work hours (on a

work or non-work day)

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Travel Time

♦ Hours Worked

– Travel between job sites during the work day

– Travel in excess of normal commuting time

but can exclude the normal commuting time or time to

travel to/from the airport or train station

– Overnight travel, if during the employee’s normal work

hours (on a work or non-work day)

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Travel Time

♦ Hours Worked

– Travel to/from home in company vehicle if

Mandated by employer;

the vehicle is a type not normally used for

commuting (e.g., dump truck);

The employee incurs a cost for driving or parking

the vehicle at his/her home; or

The travel “inures to the benefit of the employer”

• e.g., a repair business advertising that its

technicians can arrive within half an hour.

Training Time

♦ Time spent in meetings, lectures and training

is generally deemed hours worked unless all

four of the following are met:

– Attendance is outside regular working hours

– Attendance is voluntary

– The course, lecture, or meeting is not job

related

– The employee does not perform any

productive work during attendance

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Engaged to Wait / Waiting to be Engaged

♦ Engaged to wait (work hours) vs.

waiting to be engaged (not work

hours)

♦ Time is deemed hours worked

when:

– Employees must stay on or

remain near the employer’s

premises, or

– They are unable to use the

time effectively for their own

purposes

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Engaged to Wait / Waiting to be Engaged

♦ Time is not counted as hours worked when:

– Employees are completely relieved from duty, and

– The time is long enough to enable them to use it

effectively for their own purposes

♦ Includes when employees are “subject to call”:

– Employees may be required to carry a pager

– Employees may be required to leave word at

home or with the employer where they can be

reached

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Engaged to Wait / Waiting to be Engaged

♦ When waiting to be engaged (“subject to call”),

when does work time begin?

– Cashman v. Town of Tolland – Conn. Supreme

Court (2005)

Tracking Telecommuters’ Time

♦ Challenges are different

– Lack of supervision

– Work and home are the

same place

♦ Principles are the same

– Clearly define start and

end of workday

– Use technology to permit

access to work-related

sites/tools only when

clocked-in

Off-The-Clock Smart Phone Use

♦ Examples of recent class actions

– Agui v. T-Mobile Inc., No.

2009-cv-092955 at 8

(E.D.N.Y. July 10, 2009) Non-

exempt sales representatives

claimed they were required to

answer messages on their

smart phones after hours but

were not paid

The case settled for an

undisclosed amount.

Off-The-Clock Smart Phone Use

♦ Examples of recent class actions

– Rulli v. CB Richard Ellis, Inc.,

2009cv00280 (E.D. Wis. Mar.

13, 2009) A collective action

claiming the company owed

non-exempt employees wages

for off-the-clock time spent on

company-issued BlackBerries

and smart phones.

The case settled for an

undisclosed amount.

Off-The-Clock Smart Phone Use

♦ Examples of recent class actions

– Allen v. City of Chicago, No.

1:10-CV-03183 (N.D. Il. May

24, 2010) A collective action by

police officers alleging they

were required to carry and use

a BlackBerry device. Plaintiffs

seek overtime for time spent

reviewing and responding to

messages and calls during off-

duty hours

The case is still pending.

Off-The-Clock Smart Phone Use

♦ No specific official guidance

♦ General concepts apply– “Suffer or permit”

– Continuous work rule

– Engaged to wait v. waiting to be engaged

– “De minimis” interrruptions

Best Practices

♦ Prohibit off-the-clock work

– Control ambitious employees

♦ Require overtime be pre-approved

♦ Policies Restricting Work (See Employer Alert)

♦ Telecommuting / Smart Phones should be

separately and specifically addressed

– Consider limiting telecommuting/smart phones

to exempt employees

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Policy Enforcement is Key

♦ U.S. DOL Regulation: “The mere promulgation

of a rule against [off-the-clock] work is not

enough. Management has the power to

enforce the rule and must make every effort to

do so.” 29 C.F.R. § 785.13

♦ But see White v. Baptist Memorial Health Care

Systems, No. 11-5717 (6th Cir. Nov. 6, 2012)

Employer “not liable for non-payment if

employee fails to follow established process.”

Certification of Time Records

♦ Require non-exempt

employees to review and

certify time records.

♦ Require employee to identify

any inaccuracies to permit

immediate correction.

♦ Daily review is ideal but

something less frequent can

be used.

♦ Certification should cover

off-the-clock work and meal

periods.

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No Automatic Deductions

♦ Avoid daily automatic deductions for meal

breaks

– You many need to override software systems

that have this feature built in

– At a minimum, educate employ on the process

for claiming credit for missed meal breaks and

pay them when they do

– There can be no subtle pressure applied to

avoid payment

Audit Time Records for Compliance

♦ Adopt an audit protocol to ensure

employees and managers are

following policies and

procedures.

♦ Audit protocol should be

designed to be discoverable in

the event of future litigation as

part of company’s good faith

defense.

♦ Promptly investigate and

remediate any discovered

violations.

♦ Implement appropriate discipline

for managers and employees in

the event of violations.

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Questions?

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