Many employers began permitting, or even requiring, certain workers to work remotely during the COVID-19 pandemic. Even as large numbers of employees return to their workplaces, remote work continues to be a popular option for employers offering flex-work arrangements. But employers should be aware that such arrangements must be carefully crafted to avoid potential liability. A recent court case highlights the importance of compensating employees for important pre-shift duties.
The U.S. Court of Appeals for the 10th Circuit rendered a decision in October that highlights the importance of compensating employees for important pre-shift duties. Peterson v. Nelnet centered around the three minutes on average each employee was spending to start their computer and log into software essential to work operations before clocking in for shifts. The student loan servicer’s more than 300 customer service representatives sued their employer for violation of the Fair Labor Standards Act (FLSA). Originally, a trial court ruling found the activities compensable because they were integral and dispensable to the employees’ work duties. However, the trial court granted summary judgment to Nelnet because the claims were considered de minimis, too small to merit compensation.
The 10th Circuit determined on appeal the trial court’s ruling was correct: Pre-shift duties are compensable under the FLSA. But the 10th Circuit reversed the de minimis determination and directed the trial court to grant summary judgment in favor of the employees.
The court used its customary balancing test regarding the de minimis ruling. It assessed how often employees were required to perform the duties in question, the practical administrative difficulty to the employer of capturing the additional time each day and the aggregated size of the employees’ claims. The 10th Circuit found that Nelnet failed to establish it could not estimate the additional time dedicated to pre-shift activities and that the combined claims were not so insignificant as to be considered de minimis, despite the small amount of time involved a total value for all the claims of less than $32,000. The pre-shift tasks were part of the everyday work, fulfilling the requirement that the compensable activity be performed regularly, the court found.
Although the employees in Nelnet worked from the company’s facilities, the court’s ruling could have implications for employers who offer or require remote work. If remote work arrangements require certain pre-shift tasks before employees can clock in for work, and if those tasks are integral and indispensable to the employees’ principal work activities, they could be compensable. When the tasks are performed regularly and do not create an undue recording burden, even small claims may not be considered de minimis by a court.
* This article first appeared in The Journal Record on November 24, 2021, and is reproduced with permission from the publisher.