Wage and Hour Compliance: Off-the-Clock Work

Posted Feb 23 2017 by Matthew Schechter

Thanks to the wonders of technology, it has become increasingly easier for non-exempt employees to engage in small work-related acts, or to be “on call” for their employer, after they have “clocked out” at the end of a shift.  This becomes a problem, however, when such acts or waiting time are deemed to be off-the-clock work, and thus compensable time, thereby exposing employers to damages via lawsuits or claims through the Labor Commissioner.  As a result, it is important for employers and employees to know what is, and what is not, off-the-clock work.  In addition, employers should be aware of what steps they may take to limit potential liability.

Off-the-clock work is work done for an employer that does not count towards an employee’s weekly hours for overtime purposes and which is not otherwise compensated.  Examples of such work are many, but may include: setting up at a restaurant before the start of a shift or cleaning up after a shift ends; finishing paperwork after clocking out; working remotely; or sending, reading, or responding to emails or texts on a cell phone or laptop.  Remote work and using a cell phone when at home are particularly dangerous because it is easy for an employee to fail to accurately record, or record at all, time spent doing such work.

The determination of whether certain activities are off-the-clock work, thereby requiring compensation, are typically dependent on the particular facts of each case.  That said, there are three key questions courts will consider to help make that determination: (1)

Is the activity integral or necessary to the performance of the job or required by the employer? (2) Does the employee have control over when and where these activities are done? and (3) Is the time spent de minimis?

With respect to the first two questions, the main issue is control, i.e., how much control does the employer have over an employee’s actions.  The more control the employer has, the more likely it will be that such work is off-the-clock requiring the employee to be paid.  When determining control, consider whether the activities are required or necessary to do the job, or whether the employer directs when or where the activities occur.

The issue of control, and how the relevant facts will be important, may be seen when considering whether travel time or on-call (aka “stand-by”) time must be compensated.[1] With travel time, for example, one’s commute (driving from home to work, and back again) is typically not considered as hours worked and thus is not compensable.  However, if the employee must use a company car, is limited as to what the employee may do when using that car, and driving the company car is integral to the job, then even commute time may be deemed “hours worked.” 

Similarly, for employees who are “on-call,” courts will look to, among other things, whether there are geographic limitations while on-call, the frequency of calls, and any required response time to a call.  While no one factor is determinative, the ultimate question is how much freedom the employee has to engage in personal pursuits while on-call.  The more freedom or flexibility the employee has, the more the pendulum may swing towards on-call time as hours not worked.  Of course, if the employee does work while on-call, then he or she must be paid for the time spent working.

The de minimis doctrine, when applied, holds that alleged working time need not be paid if it is trivially small (typically up to 10 minutes).  While application of the doctrine is also fact dependent, rather than looking at the employer’s control, this factor focuses on the time spent on, and frequency of, the work.  Thus, courts will look at the practical administrative difficulty of recording the additional time, the aggregate amount of compensable time, and the regularity of the additional work.  The doctrine’s continued viability in California, however, is now an open  question.  At the request of the Ninth Circuit Court of Appeals, the California Supreme Court will review Troester v. Starbucks Corp. to determine if the de minimis doctrine applies to cases brought under California’s Labor Code.  Briefing should be completed within the first half of this year, with oral argument taking place, hopefully, sometime before the end of 2018.

In order to attempt to avoid issues with off-the-clock work, employers should draft a policy on off-the-clock work to include in an employee handbook, as well as cover the policy during employee trainings.  The policy may cover areas such as: prohibiting off-the-clock work; requiring employees to accurately and timely report all hours worked; prohibiting falsification of time worked; certifying that all time recorded is correct; and encouraging employees to report violations, including having a clear method for making and documenting any complaints.  If, or when, employees are found to have worked off-the-clock, they should be paid for the time worked, and – assuming there is a policy in place – disciplined for failing to comply with the policy.  Employers should also check that supervisors have not encouraged or required the off-the-clock work.

While it is almost impossible to completely prevent off-the-clock work from occurring, knowing what it is, and what steps may be taken to curb it, will help limit an employer’s liability, and ensure that employees are paid for all the work they perform.

 

Matthew Schechter is a partner at McManis Faulkner. He has a varied civil litigation practice with a particular emphasis on employment law.

 

[1] Separate from the question of whether “on-call” employees must be compensated for hours worked, on December 22, 2016, in Augustus v. ABM Security Services, Inc., the California Supreme Court held that that employers cannot require employees to remain “on-call” during rest breaks because, just as with meal breaks, employees must be relieved of all duties and be free from employer control during rest break time.