A recently-published opinion letter from the U.S. Department of Labor (“DOL”) concluded that employees should be paid for activities before their shift if the activities are “integral and indispensable” to their job. Although this is a new opinion, it largely emphasizes pre‑existing standards about when to compensate work before a shift.
Importantly, although DOL opinions are not binding law, they can reveal how an agency interprets existing statutes, regulations, or case law.
In light of the fairly new New York State law criminalizing wage theft, including a company’s failure to pay overtime, it’s more important than ever for New York employers to know when pre-shift or post-shift activities need to be compensated.
The federal opinion letter addressed these four questions about pre-shift activities, which may be apply to employers’ duties to pay for post-shift work as well:
- If, after clocking in, employees are regularly doing pre-shift activities that are integral to their job, should they be compensated for this work under the Fair Labor Standards Act?
- If employees have to wait to use a timekeeping station to clock in, should they be compensated for this time if they immediately begin work duties once they’ve clocked in?
- If employees clock in early every day, is this time negligible for administrative purposes?
- If an employer rounds up early clock-ins to the nearest hour but prevents clocking out before the shift ends, does this comply with federal labor laws about rounding?
Integral & Indispensable Activities
The Fair Labor Standards Act (FLSA) requires that employees be compensated for activities they’re employed to do and activities that are integral and indispensable to their jobs. Integral and indispensable activities can include, for example, putting on protective gear, mandatory equipment checks, or booting up a necessary computer system. When employees spend time before their shift starts by doing something integral and indispensable, their employers need to pay them.
The federal DOL applied this rule to hospital workers who started working after they clocked in but before their shift started. Their activities included locating work assignments, completing accountability documentation, assigning employees to work locations, and receiving handoff reports from colleagues. These activities are ones the hospital should pay for, because they’re intrinsically related to the employees’ job duties, and their job duties can’t be done if the employees didn’t do these things first.
Importantly, work done before a shift only is compensable if it’s integral and indispensable to an employee’s job, meaning their job duties can’t be done without the activities. It follows, then, that work that’s not integral or indispensable doesn’t need to be compensated. This includes waiting to clock in, walking to a workstation, or choosing to change clothes at work for convenience. These activities don’t contribute to an employee’s core job duties and therefore don’t need to be compensated.
These aren’t hard and fast rules; however, so it can get confusing. As the opinion notes, activities may be preliminary in one context but integral and indispensable in another. The necessity of a specific activity depends on the nature of the activity and the principal responsibilities of the person’s position.
Waiting to Clock In
Waiting to clock in isn’t compensable, even if employees are waiting after arriving at work. Generally, this time isn’t integral or indispensable to an employee’s job responsibilities. If employees clock in early and then begin work activities, they may be entitled to compensation if this work is integral and indispensable to their job.
Routinely Working Early
Small amounts of time worked beyond a scheduled shift are negligible, but only if this kind of work doesn’t happen regularly. This concept, called “the de minimis doctrine,” refers to the few seconds or few minutes of work time that can be disregarded because of administrative hassle and workplace logistics. “Insubstantial or insignificant” time spent working is negligible, but there’s no specific amount of time that’s automatically disregarded. The amount of time that can be disregarded depends on the specific circumstances.
If this happens regularly, though, employers typically are responsible for paying employees for this time. Small amounts of time worked outside a shift only are negligible if it doesn’t happen often. If work outside of a person’s shift is a regular occurrence, employers likely have to pay for it. No matter how small, employers have a duty to pay employees for any part of their regular working time. An employer also has a duty to pay for all compensable work it knows is being performed, even if it’s outside an employee’s authorized work time. Because of this, employers likely need to pay employees for small amounts of time regularly worked outside their shift, if the work is integral and indispensable, even if the duration may seem too small to matter.
Relying on the de minimis doctrine may be less successful now in light of technological advancements that make administrative tasks easier. Automated punch clock systems reduce the administrative work that originally justified the de minimis doctrine. Now that the modern workplace has moved away from physical punch cards and human calculations to automated systems, the DOL’s opinion warns that “employers should expect exacting scrutiny of de minimis claims where employees [regularly] perform off-the-clock work.”
Importantly, though, employers have legitimate options to regulate work outside a shift. Employers can and should proactively create and circulate policies prohibiting work-related activities outside of scheduled work time. Employers should (1) clearly instruct employees not to do work outside their scheduled time, (2) clearly instruct that disciplinary action may be taken if employees work outside their scheduled time without authorization, and (3) enforce these policies. If an employee violates the policy without the employer’s knowledge, the employer may be excused from compensating this work.
Rounding Practices
Under federal labor regulations, employers may round employees’ time to the nearest fraction of an hour, like the nearest quarter of an hour or the nearest 5 minutes, but only if this practice is neutral on its face and averages out over time in a way that doesn’t consistently favor the employer.
Rounding practices likely are acceptable when (1) they sometimes benefit the employer and sometimes benefit the employee and (2) the net difference between hours worked and hours compensated is minimal (3 minutes or $15 over a year, for example). Rounding practices like this don’t systematically undercompensate employees and are permissible under federal law.
However, rounding practices are likely unacceptable when only the employer benefits and there’s a substantial disparity between hours worked and hours compensated (74,000 hours lost among 13,000 employees over a six-year period, for example). When rounding practices systematically undercompensate employees like that, they don’t comply with federal law.
If employees are doing integral and indispensable work in the time that gets rounded up, and rounding never benefits employees, the practice may violate the law. For rounding to be facially neutral, it should benefit the employer at times (e.g., rounding up an early employee’s time to the start of the shift) while also benefiting the employee at times (e.g., rounding down a late employee’s time to the start of the shift). If rounding practices only round up the early employee’s time but don’t round down the late employee’s time, it’s likely not neutral. Importantly, neutral rounding policies still need to balance out over time to offset the time lost from rounding up when an employee clocks in.
New York Looks to Federal Law on Pre-Shift Activities
When New York employees claim they’re entitled to compensation for pre-shift activities, New York typically follows federal labor laws about rounding and compensating employee’s integral pre-shift activities. Although it doesn’t happen often, courts draw from these federal laws and combine them with New York State laws about overtime compensation and unpaid wages.
We’ve written about challenges managing overtime pay before. Savvy employers should be familiar with how the New York State DOL interprets federal labor laws about pre-shift activities, especially since New York often relies on these laws.
Practice Pointers for Employers
Audit pre-shift and post-shift work. Review what employees actually do before and after their scheduled shifts, including logging into systems, receiving handoff reports, checking equipment, reviewing assignments, putting on required gear, and completing documentation.
Pay for work that’s integral and indispensable. If an activity is necessary for employees to perform their principal job duties, assume it may be compensable under the FLSA and New York wage and hour law.
Don’t rely too heavily on the de minimis rule. Regular small amounts of pre-shift or post-shift work can add up quickly. With electronic timekeeping, employers should expect closer scrutiny of employer claims that a few minutes are too minor to pay.
Review timekeeping and rounding practices. Rounding must be neutral and must not systematically favor the employer. If your system rounds away employee time but rarely, if ever, rounds in the employee’s favor, it needs attention.
Train supervisors to spot off-the-clock work. Employers can be responsible for work they know or should know is being performed, even if it happens before or after the scheduled shift.
Use clear, written policies. Tell employees they may not work before or after their scheduled shifts without authorization, explain how to report all time worked, and make clear that employees will be paid for all compensable work performed.
Enforce the policy without withholding pay. This is a huge one! If an employee works unauthorized time, pay for the work if it’s compensable, then address the policy violation separately through coaching or discipline.
Watch New York overtime exposure. In New York, unpaid pre-shift or post-shift work can trigger unpaid wage, overtime, liquidated damages, recordkeeping, and wage theft concerns.
Look beyond the time clock. A clock-in time doesn’t always answer whether work time has started. The better question is whether the employee has begun performing duties that are integral and indispensable to the job.
Fix problems before they become claims. Wage and hour mistakes are often systemic. A short internal audit now can reduce the risk of DOL scrutiny, employee complaints, class claims, and costly back-pay exposure.
If you have questions on how to manage these challenges while remaining compliant, give us a shout.
We’re here to help.
