This past Tuesday, the United States Supreme Court issued a decision in Integrity Staffing Solutions, Inc. v. Busk, No. 13-433, that clarifies when a non-exempt employee begins and ends the work day – and, therefore, when an employer’s obligation to pay the employee begins and ends.
Jessie Busk and Laurie Castro worked as warehouse employees for Integrity Staffing Solutions (“Integrity Staffing”), a company which provides warehouse staffing to Amazon.com. Warehouse employees like Busk and Castro retrieve products from shelves and package those products for delivery to Amazon.com customers. Integrity Staffing, in an effort to prevent employee theft, required its warehouse employees to undergo a security screening before leaving the warehouse each day. At issue was whether employees’ time spent waiting and going through security screenings at the end of a work shift was compensable work time under the FLSA. The FLSA provides that employers generally are not required to pay employees for “activities which are preliminary to or postliminary to” the employees’ principal activities. In turn, “principal activities” encompass all activities which are an “integral and indispensable part of the principal activities.” In Busk, the Court clarified these definitions, holding that an activity is integral and indispensable to an employee’s principal activities – such that time spent on such activities is compensable – if that activity is (1) an “intrinsic element” of the employee’s principal duties, and (2) an “activity with which the employee cannot dispense if he is to perform his principal activities.” In light of this analysis, the Court concluded that the fact that security screenings were required by the employer was not dispositive, as had been argued by the plaintiff. Rather, time spent going through security screenings was not compensable because the employees were hired to retrieve and package products for shipment and that this could be accomplished regardless of whether security screenings were performed.
This is a very positive outcome for employers. However, employers still must be careful in making decisions about the scope of compensable time following Busk. In determining what constitutes a particular employee’s principal activity or activities, employers should carefully consider why the employee was hired, and what task or role the employee was hired to perform. Further, and regardless of the employer’s initial intent, were those expectations clearly communicated and are those expectations consistent with the employee’s actual duties – or would there be an evidentiary dispute over the employee’s principal activities. After determining an employee’s principal activities, the employer must carefully consider whether the particular preliminary or postliminary activity at issue is an intrinsic or inherent part of those duties. That is, could that activity be eliminated altogether from that employee’s expectations without limiting the employee’s ability to successfully complete his or her work? If so, a strong argument is now available to employers that time spent on such activities is not compensable.
Employers should be cautious not to overreach following Busk. For example, the Court’s “intrinsic element” test certainly will be further explored in the lower courts, and generally can be expected to involve very fact-specific inquiries. Plaintiffs’ counsel, of course, will argue for a broad scope of “intrinsic” – that is, compensable – elements. Employers also should recall that the Busk decision does not change existing law requiring employers to pay for all time within an employee’s “continuous workday.” That is, if an employee has already started work by performing his or her principal activities, an employer cannot carve out activities that are not “intrinsic elements” from that employee’s work day and refuse to pay for that time.
In addition, it is critical to note that the Supreme Court’s ruling applies to compensation under the federal FLSA only. Therefore, if an employer is covered by state wage and hour laws which are more restrictive than those in the FLSA, employers are nonetheless required to abide by those more restrictive laws. For example, California law states that employees are entitled to pay when they are subject to the control of the employer. See Morillion v. Royal Packing Co., 995 P.2d 139 (Cal. 2000). Thus, if an employer is subject to California’s wage and hour laws, it may nonetheless be required to pay employees for the types of preliminary and postliminary activities that the Supreme Court states are noncompensable under the FLSA.
The United States Supreme Court’s Decision on Non-exempt Employee’s Work Day
December 11, 2014