This material was originally presented on March 12, 2003, as part of a seminar entitled New Hampshire Payroll Basics sponsored by Lorman Education Services, and held at the Executive Court Banquet Facility in Manchester, New Hampshire.

A. Introduction

Determining the number of hours worked by an employee is significant under the Fair Labor Standards Act ("FLSA") for a number of reasons. First, for hourly employees, it is necessary to know the number of hours worked by an employee in order to calculate his/her wages for the pay period. Second, since the FLSA requires the payment of overtime wages after 40 hours of work, it is imperative that employers properly calculate those hours. Third, the calculation of overtime wages requires a determination of an employee's "regular rate" which is determined by dividing the employee's total compensation for the pay period by the number of hours worked.

Generally, "hours worked" are those hours during which the employee performs services for the employer. Even if the employer didn't specifically request or authorize the work, if the employer knows or had reason to know that the employee was working, the time must be counted as hours worked. While this concept may appear at first blush to be quite simple and straight forward, there are a number of activities in which employees may engage during the course of a day, some of which are considered work time and others which are not.

B. Travel Time

The time an employee spends commuting from home to work is not considered work time. However, if the employee travels to a different location during the work day at the request of the employer, the travel time would be considered work time and must be compensated. Time spent traveling a substantial distance to respond to an emergency call from the employer is also likely to be considered work time. In addition, if the employee is required to travel overnight, the travel time is most likely going to be considered work time. ⁽¹⁾

C. Breaks

Breaks or rest periods of 20 minutes or less must be counted as hours worked. ⁽²⁾ Breaks or meal periods of longer than 20 minutes may be paid or unpaid, depending on whether the employee is relieved of all duties. As long as the employee is free to use the time for his or her own purposes, it is not considered work time. ⁽³⁾ If, however, the employee's activities are restricted during the meal break or if he/she is required to perform any duties for the employer during the break, it will be considered work time and must be compensated. For example, an employee who is required to eat at her desk so she can answer the telephone is working during her meal break and must be paid.

D. On-Call Time

As with meal breaks, whether the time that an employee is required to remain "on-call" is counted as hours worked or not depends on the degree to which the employee is restricted during those hours. If the employee is required to remain on the employer's premises or so close that he/she cannot use the time effectively for his/her own purposes, the time will generally be considered working time. ⁽⁴⁾ However, an employee who is merely required to respond to a pager or leave a number where he/she can be reached is generally not considered to be working. The key facts are the response time (the amount of time allotted to the employee to report to work if needed), the limits, if any, on how far the employee may travel away from the work premises during on-call time, whether the employee can respond over the telephone or must report to work, and the frequency in which the employee is required to report to work.

E. Training Time

Generally, training is either required by the employer or is considered to be for the benefit of the employer and is therefore considered work time. ⁽⁵⁾ If, however, an employee elects to engage in purely voluntary training, outside of regular working hours, time spent on such personal pursuits would not be compensable. ⁽⁶⁾ Until recently, it was rare that any training required by the employer would be considered noncompensable. In a recent case, however, the First Circuit Court of Appeals ruled that training time which was required by the employer in order to be eligible for employment (even if incurred after employment began) was not working time and need not be paid. In Bienkowski v. Northeastern University, ⁽⁷⁾ the employer required its security officers to have EMT Certification as a pre-condition to employment. The plaintiffs were hired on a probationary status and were given one year to complete their certification. The Court determined that the employees were "students" rather than "workers" and did not have to be paid for their time attending the certification classes.

F. Other Issues

There are a variety of other circumstances in which the compensability of the time depends on the particular facts. For example, those tasks performed prior to or at the conclusion of the work day, such as changing into uniforms or special protective gear, washing up, filling out reports, picking up tools, etc. will be compensable work time if done at the employer's request and for the benefit of the employer. On the other hand, changing or washing up for the employee's convenience will not be compensable. Whether the activity is a "principal activity" and whether there is an established custom or practice of paying for such activities are factors to be considered. Time spent in union grievance proceedings is also generally work time, unless a collective bargaining agreement provides otherwise. Whether sleeping time is compensable as work time depends on the length of the employee's shift and whether or not the employee is completely relieved of duties or is required to respond to calls and, if so, the frequency with which the employee's sleep is interrupted.

Courts and the Department of Labor have also recognized the concept of de minimis time which is so insubstantial that it may be excluded from the calculation of hours worked. ⁽⁸⁾ However, there is no bright line rule for what constitutes de minimis. Case law suggests that 10 minutes probably is de minimis while 15 minutes probably is not. The question may turn on the employer's method of recording time worked and degree of accuracy in that method.

Special rules exist for employees who may be required to be on duty for more than 24 consecutive hours, such as police, fire and other safety personnel. Unless the employer and employee agree otherwise, their meal breaks and sleep time must be counted as hours worked. ⁽⁹⁾

G. Conclusion

Tracking and calculating hours worked by employees is a fundamental component of any payroll system. Unfortunately, there are many pitfalls for the unwary employer. It is essential that employers be familiar with the types of tasks their employees are performing and verify that all hours of work are being properly accounted for.

Notes:

1.     29 C.F.R. § 785.34-39

2.     29 C.F.R. § 785.18

3.     29 C.F.R. § 785.10

4.     29 C.F.R. § 785.17

5.     29 C.F.R. § 785.29

6.     29 C.F.R. 785.27

7.     285 F.3d 138 (1st Cir. 2002)

8.     29 C.F.R. § 785.47