Imagine this scenario: A group of your hourly employees works 8:00 a.m. to 5:00 p.m. As a covered employer, you know your obligations under the federal Fair Labor Standards Act (FLSA). You know you need to pay time and a half for all hours your employees work over 40 in a workweek. You make sure they don't work during their one-hour lunch breaks. You even require them to clock in and out using a sophisticated computer timekeeping program that helps you track their hours and enforce compliance with your policies.

Every morning, your employees arrive at their desks at 7:56, boot up their computers, launch the timekeeping program, and clock in at exactly 8:00. Today, four of them came into your office and said they believe they should be paid for the time between starting their computers and actually clocking in. You realize that although four minutes is arguably negligible, the unpaid time adds up to 80 minutes a month for each employee. Must you pay them for it?

FLSA requirements

The FLSA requires you to pay your employees for all hours they work. That includes all the time you require an employee to be on duty or to report anywhere for work from the beginning of her first daily "principal activity" to the end of her last daily principal activity. The employee's principal activities (the things that you hired her to do) include tasks that are an "integral and indispensable" part of those activities. Moreover, you must pay your employees for any extra time they are "suffered or permitted" (i.e., allowed) to work, even if you didn't authorize it.

The very broad definition of "principal activities" does have some exclusions. For example, you don't have to pay employees for tasks that are just "preliminary or postliminary" to their principal activities. As the U.S. Supreme Court recently explained, an activity is "integral and indispensable," as opposed to "preliminary or postliminary," if the task is "an intrinsic element" of a principal activity and one that the employee must do in order to perform her job.

Court decisions and DOL guidance

Most of the cases involving the compensability of post-boot-up, pre-clock-in time and the end-of-the-day corollary have yet to reach a decision on the merits. The courts are still wrestling with whether affected employees can sue as a class, particularly because the amount of time it takes to boot up and shut down or log in and log off can vary between individuals. The courts that have ruled on compensability have come down both ways, in large part based on that issue.

For example, in Waine-Golston v. Time Warner Entertainment-Advance/New House Partnership, decided in 2013, it took the affected employees up to two minutes to start up their computers and clock in and about 30 seconds to close the timekeeping program and log off. The U.S. District Court for the Southern District of California held that the logging in and off time was de minimis (i.e., minimal) and therefore noncompensable. The court noted that it would be administratively difficult to track the additional time because of variations in each employee's log-in and log-off practices. In reaching that conclusion, the court relied on a 2012 case, Gillings v. Time Warner Cable LLC.

In Gillings, the U.S. District Court for the Central District of California held that the time the affected employees spent waiting for their computers to boot up before they could clock in was de minimis because (1) it took six minutes, at most, and (2) it would be difficult for the employer to record the additional time since it varied based on factors such as whether the employees locked their computers or were dexterous with the log-in program.

However, in 2014, the U.S. Court of Appeals for the 9th Circuit reversed the Gillings decision to the extent that it concluded the employer was entitled to summary judgment (dismissal of the case without a trial) based on the de minimis doctrine. The 9th Circuit found that although the disputed time was very short, the employees might have been able to show at trial that the low administrative difficulty of recording the additional time and the regularity of the additional work outweighed the brevity of the task. The court also noted that the employer offered no evidence of administrative difficulty.

The U.S. Department of Labor's (DOL) Wage and Hour Division (WHD), which is charged with enforcing the relevant provisions of the FLSA, has yet to issue any guidance on how employers can avoid exposure in these situations. However, the DOL's Fact Sheet #64, addressing the application of the FLSA to call center employees, states that "an example of the first principal activity of the day for agents/specialists/representatives working in call centers includes starting the computer to download work instructions, computer applications, and work-related e[-]mails." That suggests the DOL may be inclined to treat post-boot-up, pre-clock-in time as compensable in other situations as well, especially when employees must clock in using a computer application.

Bottom line

Do not assume that any disputed work time will be considered de minimis; you must at least be able to show that it would be administratively burdensome to track the extra time. Until more courts rule on the issue or the DOL takes a clear position, the safest approach is to be flexible. For example, if your employees are booting up their computers at 7:56 a.m. and clocking in at 8:00 a.m., you might also allow them to clock out at 4:56 p.m. instead of requiring them to wait until 5:00 p.m. That will allow you to make a "rounding" argument based on the offsetting grace period.

It's also important to realize that although technology can streamline your FLSA record keeping, employees likewise have tools to help them keep independent records—and those tools are literally at their fingertips. For example, the DOL offers a free time sheet app that workers can use to track their hours, overtime, breaks, and wages on their smartphones. Given the FLSA's and the New Jersey overtime law's two- or three-year statute of limitations, employees can take their time collecting evidence and then file a wage claim seeking a significant back-pay award.

In light of your potential exposure and the lack of guidance on this emerging issue, the best course is to consult with counsel if you have any doubts at all about your compliance with federal and state wage and hour laws.

From the New Jersey Employment Law Letter, edited by: Michael T. Bissinger, Heather Weine Brochin, Francine Esposito, Gregory C. Parliman, Patrick J. McCarthy, Theresa A. Kelly, Mary B. Rogers of Day Pitney LLP.