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Providing Smart Phone to Non-Exempt Employees Can Result in Unpaid Wage Claims

    Client Alerts
  • June 17, 2011

Over the next decade, the hottest area of class action overtime and unpaid wage claims may involve employees' use of mobile devices to stay connected with work. In addition to e-mail access, smart phones can transmit documents, text messages and spreadsheets to employees at any time and in any location. Regulatory agencies, courts and plaintiffs' attorneys are increasingly discussing whether employees are being appropriately compensated for time spent using such devices outside of their normal working hours.

To date, there has been limited legal guidance with regard to when such use becomes working time. Several federal courts have adopted a "de minimis" rule, stating that occasional time spent checking e-mails or replying to messages is not compensable. However, de minimis time is measured in a small number of minutes per day (i.e. ten or less according to the Ninth Circuit). Any extensive or repeated use of these devices will be considered working time that must be accurately recorded and paid.

Many employers have reacted to this issue by prohibiting the assignment of company-owned devices to non-exempt employees. In some situations this may not be practical. In others, employees may use their personal smart phones for work purposes. In these cases, employers should develop and implement clear policies intended to govern any work performed outside of regular working hours. The policy should prohibit more than de minimis work without specific advance authorization by the employee's supervisor. It should set forth a clear requirement that work outside of assigned hours must be accurately recorded and submitted for payment.

Violations of the policy should be met with consistent disciplinary action. As with many wage and hour laws, rules in this area were never developed with modern business practices in mind. Until legislators and regulatory agencies recognize changes to the workplace created by these technologies, employers need to do their best to comply with existing wage payment requirements.