VANNOY:
Employees must be compensated for these activities. Hi, I’m Mike Vannoy, vice President of Marketing at Asure. And this is a really important topic. There’s so many small business owners and entrepreneurs that get, find themselves in hot water on this topic. They’re not meaning to do anything wrong. Whether it’s wait times, lunchtime non-productive time, travel to client not client that we can end up in, in wage and hour hot water really, really quickly. If you don’t know the law here, the law’s pretty straightforward. We’re gonna have a robust conversation on this topic, but I think the the actions are gonna be pretty black and white. And so I, I got a great guest, the perfect guest for this topic. If you’re a regular watcher of the show, you know Brian Shenker. He is an attorney at the Long Island New York office of Jackson Lewis. His practice focuses on representing employers in a wide range of workplace matters, as well as preventative advice and counseling. Brian has extensive experience defending class action and collective action lawsuits under federal and state wage and hour laws. He has successfully defended wage and hour audits conducted by the US and New York State Departments of Labor, and Brian regularly handles cases before courts and administrative agencies involving claims of discrimination, sexual harassment and retaliation. Brian, welcome back to the show.
SHENKER:
Thanks for having me, Mike. And certainly a topic I I’m quite familiar with in terms of my practice. So I’m happy to jump into this
VANNOY:
Today. Yeah, this, this, this is this is day in and day out occurrence that you deal with, and I, I, I think most entrepreneurs, I think they’re trying to, they’re trying to do things as efficiently as possible. They don’t want to overpay when they don’t have to. They’re not necessarily trying to take advantage of, of people, but there’s some really black and white law here that, that I think everybody needs to understand. So let, let’s just start out with maybe some, some definitions. So you know, the title of employees must be compensated for these activities. There’s this legalistic term, compensable time compensable, obviously tied to compensate. So, can, can you just first unpack for us what is compensable time?
SHENKER:
Right. So, you know, it’s important for employers to understand the framework that they’re working in here with the fair Labor Standards Act, the flsa. It’s interpreted very broadly and in favor of employees. And so as we go through these various, you know, compensable versus non-compensable you know, issues, it’s important to have that in the back of your mind, that if you’re in a gray area, you’re going to want to err on the side of caution here. You know, you should not expect the Department of Laborers or you know, a a federal or state court judge to necessarily look at things from your employer side vantage point. You know, they’re gonna interpret things more, you know, preferentially. So again, you know, talk very broadly, you know, there’s, there’s a very broad definition of the, the word employee.
And so that’s what we’re really looking at in terms of compensable time under the F L S A employee means to suffer or permit work. And that definition is very telling because, you know, the, the F LSA considers compensable time, not just the time that a company is requiring employees to work at work, or time that the company may have actual knowledge that the employees are working. But it can include that time when the company, you know, is not requiring the employee to work, but you know, they’re waiting to work, for instance. And, you know, we’ll get into those issues. And also, it’s not always time that, you know, the, the company is, you know, necessarily has actual knowledge of there are many decisions that stress that, you know, a company that has constructive knowledge that an employee is performing work is enough that you know, that time should be compensable. So, you know, just you know, as a real quick example of that you know, a a non-exempt, you know, hourly employee who, you know, sends an email to a manager in the middle of the night, well, even though they might not have logged that time, you know, the company certainly has some knowledge there that they were performing work and should be paid for that time. So, you know, we’ll get into those issues,
VANNOY:
But especially if the boss replies and engages in the conversation.
SHENKER:
Exactly. Exactly. So there are a lot of things where, you know, some of these you know, issues we’ll discuss today are, you know, somewhat common sense o others are not a, and like you said, Mike, it’s not always an issue of employers having, you know you know, bad motives and wanting to take advantage of employees. It’s sometimes just, you know, not being familiar enough with the rules. And unfortunately the F L S A does not care about intent, right? That’s not a requirement to establish a violation of the law. Yeah. it’s really black and white in terms of whether you fully complied or whether you didn’t. You know, and so I think one other thing to note for today is that, you know, this may be obvious to some, but when we’re talking about this compensable work time, we’re really talking about our non-exempt, you know, workers.
And that means, you know, our workers who are paid an hourly rate and are entitled to if they work more than 40 hours in a week. So, you know, there’s the overtime component, there’s the minimum wage component. And, and both of those can come up in, in the context of compensable time. Because, you know, failure to pay an employee for all their time may result in a minimum wage violation, you know, may also result in them not being paid time and a half for overtime hours. Yeah. So, you know, it’s very important to, you know, for employers to determine you know, the amount they should pay, the correct amount. And the only way you can determine that correct amount is by knowing, you know, the proper number of hours that you should be compensating your, your employees for.
VANNOY:
Yeah. So, so we talk about this all the time. The, the, the law is clearly shifting. Now, F LSA is not shifting. It’s been around, you know, since, you know, 1928, right? So it’s, it’s old, almost a hundred years old. But generally speaking, power is shifting from employer to employee through, through legislation, through administrative function. And so the purpose of this show is to bring power to the employer just through, through knowledge here, right? And this is an area that if you, if you do it wrong, you can really get in trouble. I think you know, if, if you’re running a, a restaurant and you’re working on 3% margin, you’re working on running a grocery store, you’re working on one or 2% margin labor is your number one expense, really, really tempting to, to make sure that you, you know, you don’t want to screw anybody over on purpose, but you only want to pay for work being done.
It’s the disgruntled employee who feels like they’re getting, you know, taken advantage of. That’s the one who’s gonna report you for a wage and hour violation. And once, once the state or the the department of la, federal Department of Labor is in doing their audit on that case, Pandora’s box is open at that point. So a a a as you know, Brian, lots of mistakes made by employers out of ignorance, but employees, as long as you have a good relationship with your employees, they’re generally pretty forgiving. Either they’re gonna not know and not call you out on it, or they’re gonna call you out on it, and you work it out together. And, and no legal action is necessary. It’s the employee who feels taken advantage of that gets bitter and they report it, but possibly not to you, possibly to a regulatory body. I, I, I’m not overstating that, right?
SHENKER:
No, exactly. I I think there’s an intersection here of both legal compliance and employee relations, right? And
They completely overlap in that you’re, if you treat the employees with, you know, in compliance with the law, with respect you know, they’re happier, you know, they, they feel, you know, that, that you value them and you know, their contributions to the company, to the business. And on, on the flip side, if they feel that, you know, the company is cutting corners and, you know, potentially, you know, not paying them for, for everything, you know, that that’s something that becomes both a legal challenge for the employer potentially. But you know, even before that, that might be, you know, there might just be grumblings, right? Sometimes, you know, employees are not necessarily keen on, you know, instituting a legal action, but you, you’re gonna have a lot of disgruntled workers who are, you know, upset that, you know, they’re not getting paid for, you know, say certain, you know, travel time that, you know, maybe their last employer paid them for.
So, you know, they believe it should be paid, right? And I look also, you know, on the flip side that that’s not all, you know, that’s not say, you know, you know, of course, you and I, we don’t believe employers are bad at all. That’s, that’s not, you know, where we’re going with this. And so I also wanna point out that a lot of employers who come to me are doing something else. They’re paying employees for time. They don’t have to pay them for, and in, you know environment like we’re in now, like you said, you know, labor costs are often, you know, one of the biggest fixed costs for, for a company. And if, you know, you have 20 employees in a certain, you know, classification, and you’re paying them, you know, an extra hour a day that you don’t have to, that, that adds up, you know, substantially. So you know, on that flip side, you know, it’s important to understand, you know, what is not compensable. And again, employers can always be more generous. You can always go above and beyond, you know, what the law requires. But you know, sometimes it’s just out of ignorance that employers Asureme you know, that you know, something is compensable and, you know, they can you know, avoid paying for that. And, and again, you know, how you institute that, that can be an employee relations issue, of course. But it’s certainly
VANNOY:
Important and right, important thinking. There’s two sides to that. There, there’s two sides to that, right? So that if, if you find out, and we’ll cover this some specifics, but if you find out you’re paying for something that legally you’re not obligated to one, there’s an obvious cost cutting opportunity that you don’t have to take, but you could take or I think in the concept of like a total compensation statement, it’s something that you can literally advertise and tell your employees, hey, and not try to be manipulative, but just to really communicate the value and the partnership that you try to bring as an employer saying, Hey, not only do we pay X, but we go above and beyond the law. We, we pay it for this because we think that’s fair. That’s the kind of culture we wanna create here. That could be part of your job posting when trying to recruit people as well.
SHENKER:
Exactly, exactly. In the, in the labor market we have now, you know, you’re looking for any leg up on your competition. So yeah, certainly those types of benefits can be, you know, quite valuable to, to workers.
VANNOY:
So, so let’s, let’s, again, we don’t want to go scare tactics mode here, but you know, most employers don’t realize how much things cost until they do, right? It’s not a matter of if, it’s a matter of when in most cases something happens, what are the consequences? And, and we don’t have to do a full laundry list, but just kind of paint a picture, like, what, what are the consequences? How serious should we be taking this topic?
SHENKER:
Right? No, so you, you’re exactly right. And that it rings very true that you know, that there’s a cost to noncompliance. And, you know, oftentimes, you know, when I sit down with a company that, you know, needs to change to come into compliance they look at it and they’re saying, oh, this is, you know, gonna be so costly, you know, it’s gonna increase our, our costs. But at the same time, what they’re not considering are the costs of a legal matter where you are going to get penalized substantially for, for non-compliance. So you know, there, there are really two ways that a company is going to get hit. You know, with a claim under the FFLs A, it’s either gonna be through a depart, a Department of Labor audit the US Department of Labor and that can be initiated either by, you know, an employee complaint or just a random audit.
You know, sometimes the Department of Labor focuses on different industries in certain, you know, areas and, you know, they’ll just walk in and, you know, start conducting an audit. The other way that these claims are made is through a pr, you know, a private attorney filing a lawsuit in court. And so, you know, what are, what are they gonna be able to recover if there’s a violation? So first it’s going to be any unpaid wages, right? Both minimum wages and overtime. So, you know, what does that really mean? So a common allegation is that there are off the clock hours, and, you know, a lot of what we’ll discuss today can lead to those claims, right? If there’s compensable time being worked by your employees that is not being compensated for, then that’s what we call an off the clock claim, right?
It’s, you know, you might be paying them properly for other hours, but there’s some additional number of hours that you haven’t paid them for. So, you know, those are gonna be owed at at least the minimum wage. And if that pushes their weekly hours over 40, now it becomes, you know, a time and a half issue. You know, in, in addition, you know something i I also often see from employers is a, you know, belief that they pay employees non-exempt at, at employees who should be paid an hourly rate that they can pay them an o, you know, a salary for all hours in the week, and that that’s okay. You know, sometimes, you know, they might have a handshake deal or even a written agreement with the employee that, oh, you know, this salary covers you for all hours worth.
And again, you know, that’s going to be a violation under the FS a that, you know, non-exempt employees should, should not be paid a, you know, a salary, especially, you know, when there’s overtime wages. We won’t get into how that’s calculated, but suffice it to say, you know, there, the, the calculations of what’s owed can be very large if, if, if you’re paying salaries to employees who are not supposed to be getting them. And so, you know, in addition to these unpaid wages employees can recover both at the Department of Labor and in court liquidated damages. Those are damages that are essentially a hundred percent of the unpaid wages. So if, if they’re owed, you know, 20,000 in unpaid wages, they’re owed another 20,000 in liquidated damages there’s not much of a defense against liquidated damages.
They’re almost, you know, they’re more or less the norm you know, very limited circumstance in which an employer could avoid that such as, you know, getting advice from a professional on, on how to pay. And somehow that advice turned out to be wrong, or, you know, a subsequent decision changed it, but that, you know, you can show the employer did their due diligence and, you know you know, hiring a professional. Yeah. Now, again, you know, going even, you know, not necessarily a category of damages but something that can happen both at the D O L and with a private lawsuit is that it can expand, these claims can expand beyond, you know, the one or two employees that come forward, right? At the D O L we’d call this, you know a company-wide or, you know, position or classification, wide audit and in a private lawsuit, we’re talking about under the FS a a collective action, which would allow, you know, similarly situated employees, typically those within the same, same or similar position maybe even not just at the location, but at maybe at other locations too, to join into this claim.
So these matters can grow. And even if, you know, for instance, a private lawsuit, even if the attorney doesn’t go that route, there’s leverage there, right? And, and that, you know, can help, you know, get, you know, a favorable settlement for, for the employee where, you know, there might be one employee, but hey, if you don’t settle, now, I’m gonna file that collective action motion. And, you know, there are possible, you know, 25 other employees who will have, you know, an opportunity to join this lawsuit. So
VANNOY:
Brian, what’s,
SHENKER:
What’s your, that type of potential,
VANNOY:
Brian, what’s, what’s your sense for how’s, is it, is it 50 50 result of audit versus lawsuits, or is this 80% employee hires an attorney frequently, the attorney takes the, the case free of charge and will only work on a percent of the, of the penalties, fines, settlement. What, how does this usually manifest in your, in your experience?
SHENKER:
Yeah, great question. And what I see is certainly more in the going the attorney route. And the reason for this, the reason we have a very active plaintiff’s bar you know, that’s the employees side. They are very active in these types of claims, because if the employee prevails in recovering any amount of wages the attorney will be able to collect their attorney’s fees from you, the employer. So not only is the employer paying, you know, an attorney like me to defend the case, you know, if they end up losing any amount, then the employee attorney for the employee will make an application for their own attorney’s fees to be paid by the employer. And just, you know, for example I have seen cases where the employee recovers almost a nominal amount, you know, a couple thousand dollars certainly, you know, sometimes less than 10,000.
And the attorney, because they were forced to litigate for years, you know, they have over a hundred thousand in the legal fees. And so the court awards that, so sometimes, you know, the attorney’s fees, you know, can be the biggest you know potential damages in, in a case like this. And so the, the result of that really practically speaking, is that unless an employer has a, an argument that they fully complied with the law, that it oftentimes does not make sense to get into heavy litigation and fighting because you are just pushing that plaintiff’s attorney to incur more fees, and you’re going to make a settlement more difficult or more costly, rather. And, and so that’s why, you know, oftentimes cases like these will settle early on, or at least, you know, I often advise clients to consider that because it just gets costly from both ends. So, again, not to scare employers, but this is the reason why you want to take compliance seriously, because that’s right. Any costs associated right now with getting that advice and implementing it, they are certainly less than the potential cost, you know, down the road of a, of a collective action or a, you know, a, a company-wide department of labor audit.
VANNOY:
And even if you’re doing it right and you’re not, and, and you are compliant you know, and, and you have good insurance to cover these liabilities legal fees can outrun your deductible like that. So this, this is, this is serious stuff. So okay. I think we, I think we covered what is compensable time. We talked about the consequences, how these things arise. I think, I think we’re solid there. Let, let’s just jump into the meat here. And I, and I’m looking at a laundry list of things that you sent over that we should talk through, Brian you know, what are the specific activities that you have to compensate employees for?
SHENKER:
Sure. Sure. So, I, I think, you know, maybe a good topic to start out with, which, you know, can be a confusing one, is you know, waiting time. And, you know, depending on the circumstances you know, waiting time, you know, for an employee, you know, may be compensable work time under federal law. And so there, there’s kind of a saying that that has developed it. It’s whether the employee is engaged to wait or waiting to be engaged. We’ll break that down, but, you know, the engaged to wait, that type of time that’s going to be compensable and time that should be paid. So let’s, I think it’s probably easiest to start with an example, right? Yeah. you know, these situations start, you know, arise when, you know, this non-exempt employee is not performing work during their regular, regular workday, but essentially waiting for an assignment.
For example, you know, an administrative assistant who’s reading a magazine while waiting for an assignment, right? That person is engaged to wait typically and should be compensated for that time because they’re not, you know, that employee’s not free to leave the workplace, even though they’re performing no work, you know, they couldn’t just get up and, you know, go, go shopping at the supermarket if they wanted to, right? They’re being required to stay there, and even though no productive work is being done, and they might be, you know, say online shopping or what, whatever the case may be you as the employer are requiring them to be there because an assignment could come in at any time. You know, another example would be, you know, a messenger who, who works on a crossword puzzle or reads a newspaper while waiting for a package, or a factory worker who’s, you know, congregating with some coworkers and talking while, you know, their machine is being repaired.
And so they can’t perform any work maybe for, you know, 30 minutes or so, but, and they’re just hang out. But that’s work time because they’re not, you know, it’s a short period of time and they’re not, you know, they’re not able to leave. So, you know, some of the, the hallmarks of this type of compensable waiting time are that it’s normally unpredictable and of short duration, right? So you know, and there’s not enough time for the employee to use it effectively for his own, her own purposes. So, you know, for the employees, not, while they’re not engaged in the work in which they’re hired they still remain subject to the direction and supervision of the employer at any given moment, right? These are, you know, short durations. And so, so Brian,
VANNOY:
I think I, I’m gonna give you a use case. I think I know the answer, but you’re in a manufacturing environment or some assembly type of type of environment. Machine breaks down upstream in the process. Nobody downstream can do any work. Hey, guys, machine’s down. It’s gonna take Joe an hour and a half to fix it. Everybody clock out. And I’ll, I’ll let you know when we’re back up and running status.
SHENKER:
So that might be closer to, you know, so when the employer can give the employee a specific period of time that, you know, the, this, this waiting time will end and, and the duration, you know, it gets closer to being non-compensable. Now at the same time, you know, giving those employees an hour and a half, you know, the, the, there are other questions, right? You know, are they free to do what they want? Right. You know, oftentimes you know, for instance, you know, I’ve had clients with absolutely enormous factories. And so just the walk from getting to the, from the workstation to, you know, maybe the employee locker room could be a 20 minute walk, right? So, you know, even an hour, hour and a half, is that really, you know, sufficient time off because at least half of that time is going to be spent, you know you know, really in transit between, you know, where they might be able to relax and have some time.
And also look, they’re, you know, in your example, I, I would definitely lean towards that being compensable because it’s something that’s unexpected. And even though the employer is telling them, you know, an hour and a half, is that really enough time for them, you know, to use it for their own purposes? And, and look, the, you know, these are issues, you know, where the facts of each, you know situation will, you know, will dictate it. And, you know, if you’ve ever read a Department of Labor opinion letter that yeah, they always reserve it with with a statement like that, that, hey, this is based on the facts as as you provided. And, you know, there might be others that could be relevant to this, but but yeah, you know, again, you know, especially where the employee would still be required to stay on premises, you know, that’s probably something we’re, we’re looking at as compensable work time.
VANNOY:
Brian, so let me, let me talk about a couple of variables in that, in that use case for folks, would it have been, would it have been less likely to be compensable, compensable time? Compensable time if it was a longer period of time, and if it was, if it was fixed, versus, Hey, we’re gonna be down for at least a half hour here, go ahead and clock out. So it’s undefined, it’s a short period of time, can’t really do anything else with their time versus we’re gonna be shut down here. I think it’s three hours. You guys are free to go. I’ll text meeting when it’s time to come back. Am I kind of hitting the right
SHENKER:
Boundaries there? Exactly, right. That, yeah, exactly. And so there’s some gray area, but right. Something like that, three hours. Hey, guys, you’re free to leave. I expect, you know, it’s not gonna be before 2:00 PM but I’ll, I’ll text you, you know, around one 30 and let you know, it might even be later than that, you know? So that’s something where, yeah, then they clearly have sufficient time to use that for their own purposes. You know, you may, you know, you, you’re, you know, probably permitting them to leave premises because again, you don’t need them, you know, all you’re worried about is, you know, I just want you to be back by, you know, 2:00 PM when, when we expect to be back online. And so, yeah, that would be a situation where there would be you know, likely you know, a time we’d call that, you know, instead of engaged to be waiting, you’d be, you know, waiting to be engaged, and therefore, you know, you are, you’re not engaged at that time. And so it wouldn’t
VANNOY:
Be, and Brian, in the, in the, in the, in the later use case, if I said it’s gonna be three hours, but we just, but, but we just don’t know in case it’s up and running earlier, I’d like every, I need y’all to stay here. That tips it back into compensable. Yes.
SHENKER:
Right? Right. It, it absolutely could because now now you’re limiting them and you know, for instance, you’re saying, look, I need you to stay, you know, on the floor. I, I, I don’t want you guys going, you know back to the locker room. I, I need you out here, you know, in, in case it, it is ready earlier. Things like that are going to show, you know, they’re still subject to the, you know, subject to the direction of the employer at any moment. So, you know, that takes away that, that freedom to, you know, go use the time for their own purposes. That would, that would make it, you know, you know non-compensable. So yeah, that, that type of restriction or uncertainty as to when they’ll be called back would certainly tend to tip the scale towards compensable time.
VANNOY:
Got it. All right. We, we could probably go a bunch more use cases, but I think we got the basic boundaries there. Next one is what on call.
SHENKER:
Sure. Sure. So, you know, on call time is, it’s a similar concept as waiting time, not, not exactly the same. For, for those who you know, are, you know, who are interested in the statutory framework here, oncall work is typically covered by the portal to portal act, which is really just an amendment to the fls a and so here, you know, similarly to waiting time, compensability of oncall time depends on whether the employee can effectively use the time for, you know, his or her personal purposes. Yeah. and so while it presents that same framework oncall time arises under, you know, different circumstances than waiting time so, you know, this would be you know, so for instance, an employee who must remain on call at the company’s premises or very close to the premises and, you know, could be called upon at, you know, any moment to, you know, get back to work you know, that employee, you know, is likely you know, incurring, compensable you know, on call time because they can’t use that time to for effectively for their own purposes.
You know, so, you know, by contrast, someone who doesn’t need to be on premises, and, you know, if they get a call to, you know, come back to work, they have, you know, maybe two hours to get there that that might be sufficient to be, you know, non-compensable, because that allows them to use the time, you know, for their freedom, right? Could they go to a movie, could they go shopping? Right? They could do all sorts of things with that time and not be, be restricted. So, you know, I guess, you know, an example of this, right? You know, talking about someone at the office, right? So, you know, a telephone operator who’s, you know, on duty during, you know, specified hours, but is, you know, permitted to, you know, rest during certain times when, when the phone lines aren’t busy during that rest time, they’re still working and must be paid for that because they are on call in that if the phone rings, they have to wake up and, you know, they have to get up and answer it.
Yeah. you, you know, it’s much different than someone who can be outta the office. And, you know, for instance you know, like let’s say a superintendent of a building, right? During off hours, so you know, that employee is, you know, they have a cell phone, it might ring, they might get a call from either the company or you know, a tenant to, you know, that there’s an emergency. But at the same time, if, you know, the company sets forth, you know, standards and a framework of, you know, you know, if you take the call, right, that’s compensable time, but you know, you don’t have to respond to it, you know, within, you know, you can just address it within three or four hours, right? You don’t need to be within, you know, 30 minutes of the building. It’s okay if you, you take, you know, several hours to get to that, and then, you know, that’s allowing the person the freedom to do what they want, and they don’t have to stay tied close to the place of business. So, you know, there are a number of factors here that, that, you know, that are considered to determine whether the employees can sufficiently use the time for personal purposes. And so Brenda,
VANNOY:
A few of them, I know we’re gonna, would
SHENKER:
Be,
VANNOY:
Brenda, I know we’re gonna cover like travel time. I’m just thinking about a and this maybe isn’t a great, a super common use case, but let’s say you got a, a repair a repair person, right? An employee that repairs appliances, they’re, they’re, they go to job site number one, they’re working on the appliance before they finish up, they get a call from dispatcher, Hey, second second call the day just canceled. Not sure where we’re gonna send you next. Are they considered on call or are they, is it is because they’re, they’re sitting waiting to be assigned the next task, or?
SHENKER:
Yeah, so, so it depends. I mean, in, in that case you know, it, it would really depend on how quickly they would need to go to that next job, right? If they say, Hey, you know, you’re, you’re off and when we get the next job, you know, you know, look, it’ll probably be within some, you know, geographic rate region, and look, you’ll have a couple hours to get there, you know, you know, something like that. So a lot of it is, you know, so going to those factors, I think this is a great question because now I can, you know, I, I can show you how these factors play into that, right? So is the employer imposing a, you know, an excessive geographic restriction on the employee? So I, if that company’s saying, look, you know, we don’t have any, you know, more work for you, but we, you know, we may, and, you know, it could be within a hundred mi you know, a a a 10 mile, let’s say a real, you know, short radius, a 10 mile radius, and we need you to stick around there because you know you’re gonna have to respond within a short period of time.
That’s a se a second factor. The period of time they have to respond. Yeah. you know, that might be that’s probably gonna be compensable time. If on the other hand they say, look, you know, we don’t, you know, you can go do whatever you want because when we get this call, you know, we’re not gonna require you to be there for two hours. Therefore, this employee then has, you know, a lot more ability to use that time, go where they want and, and they know that, you know, I just have to stay within, you know, two hours of this 10 mile radius, something like that, you know, that that can be, you know, helpful in establishing it’s not compensable. But, you know, other factors can be, look, another factor is actually, you know, in reality, do the employees actually engage in personal activities?
Because, you know, sometimes, you know, we look at this, you know, from a theoretical standpoint and you know, especially, you know, in HR, sometimes, you know, there’s not a recognition of what the employees actually have to do. And so it’s important to understand, you know, what, what are they doing? Obviously now we have, you know, cell phones, and so often this oncall time is not, you know, tethering someone to a specific location. But you know, I have seen situations where, you know, someone’s oncall, let’s say it’s weekend work, and if they get a call, you know, they’ll need to log, you know, maybe it’s something like it, right? That they’re on call for an on an emergency basis on the week, on a Saturday. And so, you know, the, the company might say, yeah, we will give you a call.
You know, you’ll get a call telling you if there’s work, but then you’ll need to, you know, log in from your com your home computer, right? Or, you know, and so that might be limiting, right? If, if they need to be near their home during this on-call time, get back to their computer Yeah. And their internet access. And you know, cuz look, obviously, you know, they’re not, you don’t wanna have someone doing this at Starbucks on public wifi, right? So they need to be, you know, close to their home. You know, that might be likely too much of a restriction, you know, if for instance, you know, you need to respond to this within 30 minutes, but at the same time, you know how the factors play in, even though you might have to go home, if you have two or three hours to get there and, and handle the issue from your home, you know, that that probably would lean towards it not being compensable because the amount of time you have to respond means you’ll still have, you know, sufficient ability to use that time for your own purposes.
VANNOY:
The common theme.
SHENKER:
So again, yeah, there are a lot of,
VANNOY:
Yeah, the common theme that keeps coming through here is, is how you’re restricting the employee, right? If if you’re restricting their geography, you’re restricting the amount of time if you’re restricting what other activities they can or cannot do, that’s that it’s this restricting of the employee that is the, the gating factor, right?
SHENKER:
Right. No, exactly. And so you know, and look, this scenario, it, it can happen both, you know, at work, right? Or it could be know on-call time more traditionally the way we think about it is someone who’s, you know, not on the premises and you know, like, like I said, that that scenario of you know, emergency work for a superintendent or it on, on a Saturday, you know, kind of the person who covers, you know, the non-work hour hotline, things like that and it, right? And it’s all, you know, the, the main things that I would, would usually ask a, a client first would be, you know, how quickly do they have to respond? And you know, where do they have to respond, right? Can they do it from anywhere? Right? It’s just, you know, handling a phone call. So they just have to have their cell phone on them. They could handle that anywhere. Yeah. And if it’s a reasonable period of time, they have to respond, that, that would lean towards it not being compensable. Right. Let’s move. And so
VANNOY:
Let’s move to the next, we’ve got a bunch of ’em to cover yet here. Talk, talk about rest breaks. What’s, what’s legally required according by FLS A to provide ’em? Do you have to pay ’em? Does it matter how long they’re, take us through that?
SHENKER:
Right. Great. So, you know, under federal law, under the Fs a there’s no requirement to provide, you know, rest breaks or even meal periods, which we’ll, we’ll, we’ll discuss meal periods a little differently, you know, in a moment. But yeah, rest breaks are not required. But federal law does address the compensability of of rest breaks. So, you know, commonly, right, I have clients who say, you know, Brian, my, my employees take, you know, five, five breaks throughout the day. You know, you know, they’ll take a 10 minute coffee break, you know, about you know, 20 minutes after they clock in, then, you know, maybe a, a five minute smoking break, an hour later. Then, you know, they’ll go chat, you know, with employees outside, you know a couple hours after that, another coffee break and early afternoon, another smoking break.
And these are all, you know, in the range of, you know, 5, 10, 15 minutes. And they say, look, that all adds up, you know, over the course of a day to, you know, maybe an hour of time that I’m losing, you know, productivity. Do I have to compensate them for this time? And typically the answer is going to be that these short breaks, generally we’re talking about 20 minutes or less, are considered work time and are compensable and must be paid. And that’s the case. Even if, you know, you make that employee clock out for that 10 minute break, it’s, it would still be compensable. And, and so look, a company can have rules and institute a written policy about these types of arrest breaks and limiting them. That of course is, is fine because again, the law does not require you to provide these breaks.
But at the same time, if you are an employer that allows employees to take these short breaks, you need to understand that it is compensable and that these, you know, short periods of time where they’re, they’re not working should still be paid. And I think that’s important cuz some employers say, well, if I make them clock out, anytime they clock out during the day is not work time. You know, that that’s not the case. Clocking out for, you know, 15 minutes to go, you know hang out of the water cooler or take a coffee break, you know, that that’s still a compensable time. Yeah. And, and I guess that kinda leads
VANNOY:
Us, right? I think this whole punching in and punching out thing is where people get hung up because it’s, I think it’s reasonable Asuremption as an employer, I think, oh, I make ’em punch in and punch out for that, for their, for their breaks. That, that, that alone doesn’t mean you’re not on the hook to still pay.
SHENKER:
Exactly. Exactly. I mean, that’s not under, right. We don’t wanna underestimate the importance of having employees clock in and clock out, but that is not the Yeah. And all be all of what is compensable and what isn’t. So I think, you know, first you want to understand what’s compensable and then we wanna make sure employees are clocking in or somehow, you know, recording all that compensable time so it gets paid,
VANNOY:
Right?
SHENKER:
Right. And so, right. And so what I, I think this leads right into, you know, meal breaks, right? Which I, I think is another area that there’s I wouldn’t say a lot necessarily confusion, but there, there is nuance here. And so meal periods are, you know, are often parts of of lawsuits that I see, you know, they might not be the focus, but there’s typically if there’s, you know, an overtime claim for other off the clock work, you know, probably more than 50% of the time I’m seeing, you know, a a meal break alleged violation as well. So, you know, o once again, under federal law there’s no requirement for, you know, to provide employees with meal periods. You know there, there might be state laws that require that. But, you know, federal law again, just just addresses the compensability of meal breaks does, so departmental labor
VANNOY:
Does anything, does a court even differentiate between a break versus a meal break? It’s just a break, right?
SHENKER:
Right. So a meal break, you know, when we say a meal break, we’re talking about really an employee that has at least a 30 minute break and is relieved from all duties. So, okay, you know that when I say meal break versus, you know, a rest break, I’m talking about something less than than those 30 minutes. And when we say a meal break, a proper meal break is that, you know, you could potentially not compensate an employee for, would be something that’s at least 30 minutes. And the, the, the other key is that they’re relieved of all duties during that time. And so including,
VANNOY:
That’s important cause including geography, right? I, if I, if I, if I’m gonna run out and run, run an errand real quick if I’m gonna go off property to go get my meal, if I’m gonna go to my car and take a nap or listen to a podcast, truly my choice is the employee, right? Mm-Hmm. <affirmative>,
SHENKER:
Right? Right. No one’s saying what you have to do with your meal period, right? So it is somewhat of a misnomer because right, it, it doesn’t require the employee to actually use it as a meal period. They can use it for whatever purposes they actually want. But I think for ease of discussion, right, we’re calling it a meal break. Cuz typically it’s gonna be that, you know, midday or you know, you know, dinner time or breakfast time depending on the shift it is gonna be typically provided at, you know, one of those typical meal periods. And, and it’s, you know, going to be of at least that period, you know, 30 minute period of time.
VANNOY:
Brian, am I thinking, am I thinking about it right? It still goes back to the restrictions that you’re, as an employer, you’re applying, applying to the employees. So just cuz it’s more than 30 minutes and you call it a meal break, if you say you can’t leave the building just in case something pops up or have your cell phone with you, cause in case there’s overflow on the calls or any other type of restriction, you’re likely tipping into compensable time, right?
SHENKER:
So that, that’s an excellent question. And the, there’s actually a split in the federal law. There’s a split in how different jurisdictions look at this which is why your question is so great. So, you know, there’s there’s many jurisdictions that use what’s called the pre the predominant benefits test. So, you know, for example, there’s a a Pennsylvania, a third circuit court decision that found that corrections officers you know, did not need to be paid for certain for a meal break, even though they were required to remain on premises for their meal break. And even, you know, might have had to, you know, they had to stay in uniform. They, you know, they might have been able to leave the prison without, you know, if they got permission. But that, you know, they still had to, you know, remain, you know, essentially on call to respond to emergencies.
And that federal court, as some of the federal courts in the country found, find that those restrictions did not result in a predominant benefit going to the employer. That the predominant benefit of that 30 or minute or one hour break time was still for the employee, right? The employee was the one who benefited from that time, not the not the employer. But, you know, there, there are, you know, other courts and other jurisdictions that really look to see if the employee is relieved from any and all limitations or duties during that meal period. And that, you know, any, anything as how, you know, maybe even, you know, answering one phone call during that period, you know, will result in that entire period then being compensable. So
VANNOY:
This is excellent
SHENKER:
Question that that’s an area where there’s, yeah, i,
VANNOY:
I
SHENKER:
I some disagreement. So it’s a little
VANNOY:
Gray and I legitimately asked it thinking there’s a black and white answer, but unwittingly revealed, I think a, a a good lesson here. This is one of the things that drives us crazy, right? Because there’s a lot of black and white law around hr, F L S A et cetera you know, title vii there’s a lot of really black and white law law we gotta follow. At the end of the day, this, when it sits in front of it sits, it’s human beings in the administrative bodies of departments of labor, state or federal. It’s human beings sitting behind the bench in, in a courtroom that you have to convince, right? And as black and white, as some of these things may be it is still open to interpretation, which is, it could be good news for you as an employer, but if you don’t have great documentation, you don’t have great communication, you don’t have great culture, and your fact pattern can’t line up, that ambiguity can crush you, right? So just a a always, always the, the, the lesson of documentation, process, culture creating a fact pattern because unfortunately there’s more ambiguity in, in these decisions than any of us probably want.
SHENKER:
Yeah. And, and documentation, like you said, absolutely key, you know, for this meal break period, you know, you wanna have it document, have it documented, you know, what is permitted and what isn’t right? You want them to clock out for this period, so you have it documented. You know, you want to have potentially a policy where employees have a reporting mechanism to report work if, if they performed it during their meal periods so that it, you know, they they can be compensated and you don’t run into issues and that, look, you may many employers have a written policy that you are not to perform any work during your meal period. Now, the consequence of a violation of that is that you would then need to compensate for that time, but you could also discipline employees for violating the policy. And real, real quick, one, one last thing I wanna add on, on meal breaks is that many employers, maybe not many, but some have automatic deductions for meal breaks where they’re not requiring employees to clock out.
Instead, you know, there, there’s a policy, every employee takes a 30 minute break between, you know, 11:00 AM and 1:00 PM and therefore the company just automatically deducts 30 minutes each day. Now, apol, an auto deduct policy is not per se, unlawful, but there are certain things that you need to make sure you’re doing. If you have one of those as I mentioned before, you need to make sure there’s a mechanism for employees to report when they are performing work during that period so that it can be compensated. And just as a matter of practice, you know, if that never occurs, I’ll tell you, the d o l or a judge will be very skeptical that you are actually implementing this in practice because it does happen. People take a, a telephone call, send an email, and so if you have an auto deduct policy, you wanna make sure that employees are actually reporting, you know, when they do perform work. Cause look, it, it happens, things come up you know, employees don’t love it necessarily, but things happen during the workday, you know, exigent circumstances that, that require something to get done. And you wanna make sure it gets reported so that you, you don’t run into you know, an off the clock claim there.
VANNOY:
All right, Brian, next one I want to talk about is, is travel time. And, and there’s a whole bunch of different nuanced ways this can show up, right? Whether it’s travel time from my home to to say a, a work office versus a job site that might be much further away, different location travel time from job site to job site. What if I’m a construction worker, I go to job sites, maybe I’m a home healthcare provider going from client to client, a delivery person, client to client. Lots of different ways this, this shows up. Can, can you help us understand the, the laws and how courts see compensable time as it relates to to travel?
SHENKER:
Absolutely. And this is probably one of those areas that has, you know, more confusion maybe than, than some of the others because it really depends on potentially the timing of the travel and, and, you know, and the reason and, and how it occurs. So I think we, we may go through this a little out of order, not starting at the beginning of the workday, going to the end, but I think that the, the most simple part of this is that on the jobb travel, right, travel during the workday, right? Once the workday has started and before ends, you know, any travel within that time period is generally compensable. So, you know, this would be you know, travel from site to site, right? It could be, you know, home care workers, it could be, you know, a salesperson. It could be, you know, construction workers.
You know, any time when an employee, you know, travels from a customer, customer location to location in a workday, they are getting compensated for that time. And so, you know, a caveat to that is, you know, there can be an agreement to pay that at a d different rate, right? You know, you may have an employee who’s being paid, you know, $30 an hour for their work time, but as long as you set out, you know, advance written notice, you know, you might compensate travel time at, you know, slightly less of an hourly rate. But nonetheless, it is you know, it’s still compensable. You know, and, and look how this relates to other types of travel is, you know, sometimes there’s confusion where, you know, an employee reports to a specific location at the start of the day, right? Maybe it’s the, the company’s premises a warehouse you know, any particular place they’re required to report and they pick up tools, they get an assignment, they get a company vehicle or, or anything else there.
They don’t even need to be performing, you know, productive work, but they’ve been required to report somewhere. So, you know, as soon as they report there, they’re, you know, they’re on the clock, they should start being paid. And then, you know, if they travel, if they pick up their tools and then travel an hour to the customer location, that hour of travel is compensable. You know, likewise, you know, at the end of the day, if you know the, the employee goes from the very last customer and instead of driving home, they’re required to drive either, you know, in their own vehicle or the company vehicle, you know, back to, you know a garage or the company premises for any reason that, that travel time back to that those, the, that location will be compensable. And so, you know, that is, you know, while it’s somewhat a simple con a concept, you know, we need to remember that because a lot of times employers are just thinking, oh, the, the real work is starting when they get to that first, you know, customer site, not when they picked up their tools from the office.
Ag again, you know, companies can make arrangements so they don’t have to travel to that first you know, meeting point first in, in order to avoid, you know, compensating for some travel time. But very important that travel time during the day you know, will be compensable.
VANNOY:
Brian, what, what about,
SHENKER:
And then, so kind of following, go
VANNOY:
Ahead. Yeah, so different use cases. So I, I traveled from my home to the shop, so to speak, and then I got, then I, in a utility truck that’s equipped on all the tools and parts and stuff, and I go from there to job site to job site, construction service, whatever that may be, travel time from my home to the, to the workplace, not compensable, correct?
SHENKER:
That’s correct. Track ordinary travel time from home to work. Yep. Non-compensable.
VANNOY:
And obviously you just talked about from location to location from there is compensable. What about the scenario when the company lets you take the company truck? So it’s, you’re leaving from your home, you’re not a home office employee because you’re working out in the field at job sites, in the customer locations. Is, are you on the clock to be, is it, is it content on the clock is the wrong question. I’ve just learned that. Is it compensable time driving from your home to the customer site or to the job site if you are equipped in driving the company vehicle with all the tools?
SHENKER:
Great question. So typically not, right? If all you’re doing is, you know, and a lot of companies will do that to, you know, avoid that issue of having to pay them from when they pick up, you know, the truck to drive to, to the location. So, right. You, you can give employees, you know, the vehicle during the work week to take home. And that way, you know, when they drive that vehicle from their home to the first location directly. That’s not compensable. Now, the only caveat there is maybe, you know, if there is some work that they’re required to do first, right? If, if before they leave home in the company vehicle, there’s some amount of prep work or, you know, cleaning of equipment or, you know, some type of productive work that needs to be done before they start that travel, you know, that could change at all because then their workday has begun potentially at home or in their driveway when they’re, you know, repairing some of the the equipment in the, in the car, right? But generally, generally absent that type of situation, just because the employee is using the company vehicle to travel from home to a site that does not make it compensable.
VANNOY:
How might geography play into that? So if I’m a local appliance repair person you know, I’m in my local community, it’s nothing’s more than 15, 10, 15, 20 minute drive. That’s one thing. But if I’m a, if I, if I repair a specific type of air compressor used in manufacturing, I might have a 20 minute drive to this client. I might have a two hour drive to that client. Certainly that two hour drive would be compensable, wouldn’t it?
SHENKER:
Right? Yes. It, it would be so, right. The federal law right, requires employers to compensate employees for that type of unique travel, right? Like a, a special assignment to a, to another city, right? Where, you know, for instance, you know, the employee works at a, typically works at a fixed location let’s say in you know, I, I’m here in New York, you know, so in, you know, New York City, and then one day they’re gonna have to go up to Albany, which is, you know, probably five, you know, let’s say five hours maybe plus away. Yeah. They would have to be paid for that entire travel time to that other city. And look, five hours isn’t limit, like you said, it could be just a, a matter of, you know, a a two hour commute when their regular commute is only 15 minutes. But yeah, those special, you know, one-off assignments should be compensable if it requires, you know, substantially more travel time than usual.
VANNOY:
Maybe last use case I would ask about. I’m so this is obviously for non-exempt employees. So these are hourly employees and day in, day out, I, you know, drive to my work and I’m you know, I’m, maybe I’m something technology. I’m, I’m helping clients. My, my pay is very, very straightforward. But I have this one off where the company has decided to send me onsite to a customer that’s in a different city. So I’m hopping on an airplane, I’m staying in a hotel, I’m driving to that client site for a three day project. What, what in that scenario is compensable versus not? I mean, do they gotta pay me the entire time that I’m gone away from my home? How about tra Is, is sitting on an airplane considered travel time? Walk us through that scenario.
SHENKER:
Yeah, great question. And, and this gets some more complications probably than the others. But the general rule here would be, you know, if you’re, you know, incurring that type of maybe, you know, overnight or, you know, air travel or you know, something maybe on a train things like that, you know, an employee who travels, you know, away from home like that should be paid for their you know, should be paid if they incur the travel during normal during normal work hours. And that is, whether it’s, you know, on a weekend or a weekday, if they’re traveling during those normal work hours they should be compensated. Now, even if it falls outside of that, let’s say this is overnight travel, and they typically don’t work overnight, but that, you know, for instance, the employee is, you know, doing work, right? You have a laptop or, you know, some type of electronic device, or you’re taking, you know, making calls. You know, any work that’s actually performed during that travel time that, that, you know, converts it to compensable travel time. Yeah. so, right. So, you know, the employee who takes public transportation instead of their own car and then is doing work on, you know, on, on the train, no matter what time of day that would be, that would, that would then, you know, be compensable working time.
VANNOY:
Yeah. can, are there other edge cases, and we don’t have to go to, in a, in the craziest scenarios, that doesn’t really apply to most folks, but are there other use cases that we should be exploring around travel time?
SHENKER:
I think the, these, you know, what we went through, you know, cover the, the broad, you know, scenarios. And look in, in my practice, I would say the, the most common type of claim that I see is a failure to pay for travel time during the workday, right? That when, you know employees are traveling from customer to customer many employers have the misunderstanding that that’s, you know, that’s counted like, you know, like home to work, travel and is not compensable. But you know, that that’s not the case that if you’re looking at any travel time within the workday and you’re not compensating for employees for that, you should really, really look into that because most likely it’s going to be compensable. So that, that’s really where I, where I see, you know, issues arise most in, in, in terms of litigation.
VANNOY:
So Brian of all the buckets here, we, we, we talked a a lot today. I think, I think we’ll wrap it there, but engaged waiting time versus non-engaged waiting time. So whether it’s waiting time, whether it’s oncall the waiting to work, whether it’s rest breaks, whether breaks for rest breaks for meals travel time, other stuff we even haven’t talked about, sleeping and whatnot. I, I, I think the guidance here for employers is it’s, it’s all about how you are or are not restricting the time of the employee. If it’s, if it’s uncertain times that are shorter in nature, you can’t leave the job site. You can’t do this. You must have your computer with you, you must have, the more you restrict, the more likely you are to be in a compensable area. The more open-ended you can leave the site. I don’t care where you are. You don’t have to take your computer with you. The more you are on that end, the longer periods of time that they could actually do something with that time you’re more in the direction of non-compensable time. It, it, is it, is it safe to put it in kind of those, I don’t wanna say two buckets, maybe a continuum? Yeah,
SHENKER:
Yeah, yeah. I think broadly speaking, you know, that that’s quite accurate. And I think the only thing I’ll add, and I, I think you and I mentioned this at least a couple times every time we speak, is that documentation is also a key. So, you know, when we’re talking about those restrictions versus less restrictions, you know, that’s always going to, that, that can come down to a factual dispute. So a written policy that explains, you know, what the expectations are during you know, on call time, for instance, or, you know, during break period, you know, meal breaks, you know, those types of things being in writing, that can be so helpful to a company to establish, you know, yeah. What actually, you know, was expected and what really occurred.
VANNOY:
Right? And, and I’ve done it a couple times. I don’t wanna disparage your industry, Brian, but the, the reality is, so you’re, you’re, you’re, you’re with the good guys. You’re helping the employers. There’s a lot of people will just take work knowing that they’re gonna get a fraction, a, a portion of a settlement because the employer doesn’t have good documentation, even if the employer didn’t do anything wrong. But if you have a job description that describes what the employee’s work is supposed to be, you have an employee handbook that describes the policies for an organization. If it’s a, an non-exempt employee, and they are punching in and punching out, and you have an audit trail of the breaks they are or not taking and, and how they show up to do the work. If you have a good fact pattern, the opposing attorney is gonna have an initial conversation with the, the, the, the employee who files the complaint and wants to pursue action.
And they’re gonna say, you don’t, you don’t have a case here, and nothing will happen likely. Or if they do, it’s gonna be settled really quick because of your, your documentation of a good fact pattern. But if you are, even if you’re completely in the right, this employee is making stuff up, they’re disgruntled it’s not fair to you at all. If you have no documentation, you don’t have a fact pattern. Hard to imagine how you’re not gonna at least incur some legal fees to defend yourself, and at least maybe a deductible on your insurance policy. The, the documentation just kinda means everything here. Brandon, anything you’d want to add in closing?
SHENKER:
Absolutely. Absolutely. Now, I’ll just say, you’re exactly right. You know, and it’s not about making my job easier, which it does. If there’s documentation, it’ll save the company money if there’s ever a dispute that that’s what it’s all about. When, when you get into these being able doing complying, but being able to show the compliance,
VANNOY:
Well, you said something at the top of the hour that I’ll, that I’ll close with. I think the nuance of compensable time between non-compensable time, understanding that there is maybe a bit of a, a nuance scale as even though the law may read black and white, these things are interpreted on, on a, on a bit of a scale. If you are paying people for things that you are not legally required to it, you have an opportunity to either save money by not paying, or I, I almost think the opposite. Brag about it. Don’t just consider it part of the as is include it as part of a total compensation communication strategy, letting employees know, Hey, we’re not legally obligated to because, but because we love you, we’re a great employer. This is the kinda relationship we want. And so you remind people of what you’re doing, and you include on your job posting to, to recruit people.
So that employee who is filling out job application on this side of the street versus your side of the street, they’re comparing their offers between the two in this highly competitive marketplace. And, and, and they’re saying, oh, there’s a fringe benefit. They actually pay me above and beyond for X, Y, and Z even though they don’t have to. Simple things like communicating what you do above and beyond can be a really big tool in your war for talent. Okay. I think that does a, a, a good job. I think we really covered the, the, the topic. Brian always enjoy talking to you. I learned a ton. Thanks for you joining me today, and thanks for everybody else joining in until next week. We will talk to you later.