Picture this tricky FLSA issue: Your company invested in a computer-based time clock. But now workers have to boot up computers – before they can clock in. Does that amount to a violation of the Fair Labor Standards Act (FLSA)?
Time clock’s on the computer
A call center in Las Vegas provides customer service and scheduling for an appliance recycling business. Call center agents are hourly, nonexempt employees. Their primary work responsibilities include providing customer service and scheduling appointments for customers over the phone. Company policy prohibits off-the-clock work and requires hourly employees to record their actual time worked.
The company used a computer-based timekeeping system. To reach the timekeeping program, employees had to turn on or boot up computers, log in with their usernames and passwords, and open the timekeeping software. At that point, they could clock in on the computer. Further, employees could use “punch claim forms” to correct inaccuracies on their timecards due to technical issues.
Estimates of unpaid time …
Employees were not assigned to a specific computer. Instead, it was a first-come, first-served arrangement. As such, the length of time spent before employees could clock in varied, depending on the age of the computer and whether it had been shut down or was in sleep mode. The average was estimated to be between 6.8 to 12.1 minutes to boot up computers.
Once clocked in, employees used software called “Five9,” a phone program that operates through employees’ computers rather than a physical telephone. At the end of each shift, employees wrapped up the call they were on, closed out Five9, clocked out and then logged off or shut down their computers. Employees gave varying accounts of how long it took to log off their computers. On average, it took an estimated 4.75 to 7.75 minutes to log off and shut down computers.
Employees filed a class-action suit, alleging violations of the FLSA. Specifically, they asserted they should’ve been paid for the time spent:
- booting up their computers prior to clocking in via the computer-based timekeeping system, and
- closing down their computers after closing out of the timekeeping system.
The company filed a motion for summary judgment.
Company wins first round in court
The district court sided with the company, holding that “[s]tarting and turning off computers and clocking in and out of a timekeeping system [were] not principal activities” of the employees’ jobs because the company hired them “to answer customer phone calls and perform scheduling tasks.”
Moreover, the court noted that the company “could dispense with the electronic timekeeping method and the employees could still perform their work.”
As such, the tasks of booting up and shutting down the computers were “not integral and indispensable to the employees’ duties,” the court held, so that time was not compensable under the FLSA.
The employees appealed to the Ninth Circuit.
A brief history of this tricky FLSA issue: What you need to know
The FLSA was enacted in 1938. As you well know, it requires companies to pay nonexempt employees one-and-a-half times their regular pay for any time worked over 40 hours in a single workweek.
A few years later, in Anderson v. Mt. Clemens Pottery Co., the U.S. Supreme Court held that “the statutory workweek includes all time during which an employee is necessarily required to be on the employer’s premises, on duty or at a prescribed workplace.” The Court provided specific examples, such as activities like “walking to work on the employer’s premises,” “putting on aprons and overalls,” and “turning on switches for lights and machinery.”
Not so fast! Congress enacts checks and balances system
The following year, Congress passed the Portal-to-Portal Act, an amendment to the FLSA, to “correct the ‘unexpected liabilities’” created by the high Court’s broad ruling. In a nutshell, the amendment clarified that companies are not required to pay workers for the time they spend on activities done before or after their principal job duties, often referred to as “preliminary” and “postliminary” activities. Examples of this non-compensable time include traveling to and from work and engaging in incidental activities before or after work.
A 1956 ruling highlights the Court’s revised understanding of the FLSA in light of the Portal-to-Portal Act. In Steiner v. Mitchell, the Court held that “activities performed either before or after the regular work shift … are compensable … if those activities are an integral and indispensable part of the principal activities for which covered workmen are employed.” In the case, workers at a battery factory changed clothes prior to shifts and showered afterward because they were exposed to toxic dust while working. As such, the court held the pre- and post-shift tasks of changing and showering were “indispensable” – and thus compensable under the FLSA.
But not all pre- and post-shift tasks are “integral and indispensable” – even if they are required by companies.
For example, in Integrity Staffing Solutions, Inc. v. Busk, the Court heard a case filed by warehouse workers at Amazon who were required to undergo security screening before leaving the warehouse at the end of their shifts. Ultimately, the Court determined that time was not compensable under the FLSA because “the screening was not ‘an intrinsic element’ of the job the employees were employed to perform – retrieving products from shelves and packaging them for shipment.”
Workers boot up computers: Is that compensable time?
Applying the “integral and indispensable” test to the current case, the Ninth Circuit first examined the job that the workers were hired to perform – answering customer phone calls and performing scheduling tasks. How workers completed these tasks was important, the court said. Importantly, they used computer software for the phone tasks and the scheduling tasks, the court noted.
Because the workers had to turn on and boot up computers to access the software to phone customers and schedule their requests, the act of “turning on the computer itself is a principal activity … and the time spent waiting for the boot-up process is a part of the continuous workday.”
As such, turning on and booting up computers was “integral and indispensable to the employees’ duties and is a principal activity under the FLSA,” the Ninth Circuit decided.
Key lesson for HR and supervisors
This case turned on employees’ primary job duties. The court clarified that its decision was not about workers booting up computers to get to the timekeeping system. Instead, the court explained that it sided with these workers because they couldn’t complete their actual work without booting up the computers.
Thus, when determining whether a particular task is “integral and indispensable,” a good rule of thumb is looking at whether the job can be performed if the task is eliminated. No? Then it’s likely an “integral and indispensable” task that is compensable under the FLSA.
Shutting down computers: Ninth Circuit punts back to lower court
In the footnotes of the ruling, the Ninth Circuit clarified that its opinion was limited to the issue of booting up computers.
It explained that the parties disputed whether the workers were instructed to shut down the computers at the end of their shift. The court also said time spent shutting down computers might be compensable, depending on whether it was “determined to be a principal activity in and of itself.” More info was needed, so the court remanded on the issue of shutting down computers.
What about that form the company provided?
The company argued that it had no knowledge of the alleged overtime so it couldn’t have violated the FLSA. The company said it provided punch claim forms for workers to report additional time, but the workers didn’t use them. The company reasoned that, because it provided a procedure to correct inaccuracies, then it wasn’t responsible for paying employees for unreported time because it didn’t know the work was being performed.
Since the district court did not address this issue, the Ninth Circuit remanded the question to the district court without opining on it.
Thus, the Ninth Circuit reversed the summary judgment on the FLSA claim as it pertains to booting up computers. It remanded the case for further proceedings on whether:
- Time spent shutting down the computers was compensable under the FLSA, and
- The company had no knowledge of the alleged overtime so that it was not a violation of the FLSA.
Cadena v. Customer Connexx, LLC., No. 21-16522, 2022 WL 13743450, (9th Cir. 10/24/22).