© 2010 Fox Rothschild 1 What is “Working Time” and When Is It Compensable? June 30, 2010 Presented by Mark E. Tabakman, Esq.

© 2010 Fox Rothschild 2 Incidental Activities Performed Before or After Workday  Incidental time spent by employees before or after their workday on activities, so-called preliminary and postliminary work, if sufficiently integrated with the principal duties is compensable. Example: Cashier balancing cash drawer before/after shift.

© 2010 Fox Rothschild 3 Incidental Activities Performed Before or After Workday  In other words, if the employee cannot perform his principal job without first undertaking the preliminary activity and then, at day’s end, the postliminary activity, the likelihood is that the time is compensable.  The other key factor is whether there is any employer compulsion to engage in the activity or come in early to accomplish the task(s).

© 2010 Fox Rothschild 4 Changing Clothes, Showering, and Washing Under FLSA  The donning and doffing of clothing are considered principal activities -- and thus compensable -- if they are integral and indispensable to an employee’s work.

© 2010 Fox Rothschild 5 Union Contract Can Exclude Compensable Time From Hours Worked  Even though time spent by the employees changing clothes or washing at the beginning or end of a workday would be compensable hours worked under FLSA, such time can be excluded from hours worked if a labor union consents to having such a provision within the contract.

© 2010 Fox Rothschild 6 Union Contract Can Exclude Compensable Time From Hours Worked  On June 16, 2010, the US Department of Labor issued a position paper, a so-called Interpretation, on whether certain preliminary and postliminary activities related to putting on safety equipment and safety clothing constituted compensable work time. In the Interpretation, the DOL took the position that it is in fact working time. See Administrator’s Interpretation, , found at LSA.htm. LSA.htm

© 2010 Fox Rothschild 7 Union Contract Can Exclude Compensable Time From Hours Worked  The position paper also addressed the issue of whether clothes changing (which is itself non- compensable) can be deemed a “principal activity” that starts an employee’s continuous work day. The agency ruled that such an activity may start an employee’s work day, meaning that all activities following that “start,” including walking to the work station, then are also compensable. The agency ruled that this activity can start the work day. This occurs when the activity is deemed essential to the employee’s job. This is an important ruling because it could require compensation to be paid, whether the clothes are safety-oriented or not.

© 2010 Fox Rothschild 8 Union Contract Can Exclude Compensable Time From Hours Worked  The key issue for employers to focus on is what is the nature of the preliminary/postliminary activity and what is the relation to the main job. The employer also need not be in the food processing industry to be impacted by this position paper. For example, in a restaurant, if the employer requires cashiers to report ten minutes early and leave ten minutes late to balance their cash drawers, that activity will be deemed integral to the main job and therefore compensable.

© 2010 Fox Rothschild 9 Travel Time  The time employees spend commuting from home to and from their regular place of work each day is not work time, even if the first location changes (on a daily basis).  Work time does include time spent traveling to another location for a special assignment, substantial travel for an emergency outside the normal working hours, and time spent traveling during regular work hours as part of the employee’s principal job duties.

© 2010 Fox Rothschild 10 Travel Time  Time that an employee spends traveling as part of his principal activity, such as travel from jobsite to jobsite during the workday, must be counted as hours worked.  If an employee reports to a central location to pick up equipment before proceeding to his or her assigned worksite, the time spent traveling to the central location is not work time. The time spent traveling to the assigned worksite is work time.

© 2010 Fox Rothschild 11 Travel Time  Overnight travel or travel away from home is work time when it cuts across the employee’s normal workday and/or requires the employee to work on weekends or days when he or she would not otherwise be required to work.

© 2010 Fox Rothschild 12 Travel Time  Under the Employee Commuting Flexibility Act, travel between home and work in a company- owned vehicle is not paid work time as long as the travel is within the normal commuting area for the employer’s business, and the use of the vehicle is subject to an agreement between the employer and the employee or the employee’s representative.

© 2010 Fox Rothschild 13 Basic Conditions for Non- Compensability of Training Time  Attendance at lectures, meetings, training programs, and similar activities need not be counted as working time if the following four criteria are met:

© 2010 Fox Rothschild 14 Basic Conditions for Non-Compensability of Training Time  Attendance is outside of the employee’s regular working hours;  Attendance is in fact voluntary;  The course, lecture, or meeting is not directly related to the employee’s job; and  The employee does not perform any productive work during such attendance.

© 2010 Fox Rothschild 15 Involuntary Attendance  Attendance is not voluntary if it is required by the employer. It is not voluntary if the employee is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected by nonattendance. Then, the hours are compensable.

© 2010 Fox Rothschild 16 Training Directly Related to Employee’s Job  Training is directly related to an employee’s job if it is designed to make the employee handle his job more effectively as distinguished from training him for another job, or to a new or additional skill.

© 2010 Fox Rothschild 17 Training Directly Related to Employee’s Job o Where the training course is instituted for the bona fide purpose of preparing for advancement through upgrading the employee to a higher skill, and is not intended to make the employee more efficient in his present job, the training is not considered directly related to the employee’s job even though the course incidentally improves his skill in doing his regular work.

© 2010 Fox Rothschild 18 Training Directly Related to Employee’s Job  If employees attend an independent school, college, or trade school after hours on their own initiative, the time is not counted as hours worked, even if the courses are related to the job.

© 2010 Fox Rothschild 19 The Minefield of “On-Call” Time  The Supreme Court has held that time spent waiting for work is compensable if the time waiting is spent “primarily for the benefit of the employer and his business.” The determination of whether time is spent for the employer’s benefit depends upon all the circumstances of the case.

© 2010 Fox Rothschild 20 The Minefield of “On-Call” Time  Though the U.S. Department of Labor and the U.S. Supreme Court have been reluctant to establish a legal formula, courts and the U.S. Department of Labor, in dealing with this issue, focus on a two- pronged inquiry: - The degree to which the employee is free to engage in personal activities; and, - The agreements between the parties

© 2010 Fox Rothschild 21 The Minefield of “On-Call” Time  In determining whether an employee is free to engage in personal activities, courts have considered a number of factors: - Whether there was an on-premises living arrangement; - Whether there were excessive geographical restrictions on the employee’s movements;

© 2010 Fox Rothschild 22 The Minefield of “On-Call” Time - Whether the frequency of calls was unduly restrictive; - Whether the fixed time limit for response was unduly restrictive; - Whether the on-call employee could easily trade on- call responsibilities; - Whether the use of a pager could ease restrictions; and - Whether the employee had actually engaged in personal activities during the on-call time.

© 2010 Fox Rothschild 23 The Minefield of “On-Call” Time  The key question for determining if an employee must be compensated for waiting time and on-call time is whether the time in question can be used effectively for the employee’s personal purposes.  An employee who is on duty and waiting to be assigned a task is considered to be working. Generally, an employee is on duty when the time is controlled by the employer and is of relatively short duration. When the employee is completely relieved of duty, however, the time need not be counted as hours worked.

© 2010 Fox Rothschild 24 Rounding  The FLSA explicitly permits rounding of an employee’s starting and stopping times — so long as the rounding does not always benefit the employer.

© 2010 Fox Rothschild 25 Rounding  On April 27, 2010, the New Jersey Department of Labor and Workforce Development stated that it will propose new rules pursuant to Title 12 of the New Jersey Administrative Procedures Act, which would adopt the federal rounding standard, a major turnaround in policy.

© 2010 Fox Rothschild 26 Compensability of Lunch and Break Time There is no federal law requiring meal breaks in industries or offices. Breaks of up to 20 minutes, however, must be counted as work time, and those breaks that last more than 20 minutes need not be counted as work time, provided the employee is relieved of duty. Lunch time must be at least 30 minutes and employees must be relieved of all duties. Under the FLSA, the employee may not be permitted to leave the premises, but under New Jersey law, the employee must be allowed to leave the premises.

© 2010 Fox Rothschild 27 Compensability of Lunch and Break Time  Many employers are utilizing time clocks that automatically deduct thirty minutes for lunch every day. Both the state and federal Departments of Labor have been focusing on this practice and making “class” assessments for lunches allegedly worked through but not paid for.

© 2010 Fox Rothschild 28 Contact Information Mark E. Tabakman, Esq