For many businesses, advances in electronic communications mean that employees are always within reach. One unintended consequence of this advance in communications is that employers may inadvertently be working employees “off the clock” in violation of the federal Portal-to Portal and Fair Labor Standards Acts.
Earlier this month, in Rutti v. Lojack Corporation, Inc., the Ninth Circuit Court of Appeals reversed summary judgment for the employer in a class action case seeking compensation for time spent exchanging electronic information outside of normal working hours. Lojack technicians were required to transmit installation data summarizing the day’s work once they got home and had access to a modem.
The Ninth Circuit concluded that the time spent sending such data could be considered working time under federal law. The court cited a three-part test for determining whether incidental time spent on work activities outside of normal office hours is compensable working time. The Ninth Circuit reviewed (1) the administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.
In this case, the court concluded that the additional duties could qualify as working time. While less than 10 minutes per day spent on these tasks is generally considered de minimis, in this case the transmissions had to be confirmed and often resent, exceeding this threshold. The Ninth Circuit remanded the case for a jury trial on the amount of additional work performed.
This case holds obvious implications for a wide range of employers. Employees classified as non-exempt under the Fair Labor Standards Act are frequently given Blackberries or other PDAs, or check their work e-mail at home. Newer technologies such as instant messaging or Twitter are also used to keep touch with employees outside of normal working hours.
An occasional glance at a Blackberry or composition of a quick e-mail response outside of work probably falls within the de minimus exemption recognized by the Ninth Circuit. However, at some point regular and prolonged use of these communication devices will become compensable working time, subjecting the employer to claims for additional wages, including overtime.
Employers manage these risks in several ways. First, they can establish policies that instruct employees to limit use of such devices to working hours and specifically approved additional hours outside of work. Understandably, such policies can be difficult to enforce. Employers can also instruct employees that more than occasional use of such devices (maybe more than 10 minutes per day) should be recorded as working time. The employer can then review and manage time spent using electronic communications outside of work, and structure salaries and duties to meet compensation budgets. Some employers may decide to limit devices and electronic access to exempt employees.
These wage payment laws were never written with modern communications technologies in mind. As their use proliferates, employers can expect increased scrutiny and litigation over paying for time spent using these devices.