Employment Law

What Exactly is ‘de Minimis’? Working Off the Clock in World of E-Mail, Texts

Smartphones have changed the employment landscape. Nonexempt employees can communicate via text or e-mail any time of the day or night and may be expected to do so. My habit in the evenings is to check my work e-mail, even if only to get a sense of what the next morning may bring. If a response is needed immediately or I’m going to be out of pocket the following morning, I’ll respond that evening. Nonexempt employees regularly engage in this type of activity after working hours, even if their employer doesn’t require it. But are employers obligated to pay for those efforts?

The answer depends on the application of two legal principles. First, did the employer know the employee was working off the clock? Second, was the time spent working de minimis?

Compensability of Off-the-Clock Work

As a general rule, yes, employers must pay for work that occurs outside of regularly scheduled working hours. Under Fair Labor Standards Act (FLSA) regulations, if an “employer knows or has reason to believe the work is being performed, he must count the time as hours worked.” It doesn’t matter if the work was specifically requested or even authorized. It doesn’t matter if the employer has a policy prohibiting off-the-clock work.

Let’s assume an employee responds to a couple of work-related e-mails while sitting on the couch in the evening. There is no expectation that he do so, and he wasn’t specifically asked to respond outside of working hours, but his responses were sent to supervisors or managers. In that situation, the employer, through its supervisors, has knowledge that the employee is working off the clock. It must pay for the time spent working.

Compensability of ‘de Minimis’ Work

The answer to the second question is a bit less certain and a bit more complicated. Back in 1946, the U.S. Supreme Court endorsed the use of a “de minimis rule” when considering whether the amount of time worked was so small that it could be considered “negligible” and therefore not requiring payment. According to the Court, “[w]hen the matter in issue concerns only a few seconds or minutes of work beyond scheduled working hours, such trifles may be disregarded.”

The U.S. Department of Labor (DOL) has adopted a similar, but not identical, principle. One of its FLSA regulations provides that “insubstantial or insignificant periods of time beyond the scheduled working hours . . . may be disregarded.” The regulation, however, contains at least three limits on applying the principle:

(1)    There must be practical administrative difficulties in precisely recording the time for payroll purposes.

(2)    The time worked must consist of “uncertain and indefinite periods of time involved of a few seconds or minutes duration.”

(3)    An employer may “not arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time or practically ascertainable period of time he is regularly required to spend on duties assigned to him.”

Notably, the regulation cites various 1950s-era cases finding that “working time amounting to $1 of additional compensation a week is ‘not a trivial matter to a workingman’” and 10 minutes per day is not de minimis.

Courts will generally analyze three factors to determine whether time worked should be considered de minimis and not compensable: (1) the administrative difficulty in recording the time, (2) the aggregate amount of time worked without compensation, and (3) whether the type of work is performed on a regular basis.

While numerous court opinions have found that working time of less than 10 minutes is de minimis, there is growing doubt about the rule’s continued application. For instance, the Supreme Court recently declined to apply it, noting the FLSA specifically requires employers to compensate employees for relatively insignificant periods of time connected to their primary work tasks.

In addition, employers are strongly advised not to focus solely on the amount of time worked. That is only one factor to be considered. Modern technologies are changing whether and how you can track work time for payroll purposes. For instance, software allows employees to clock in and out remotely or even on their cell phones. Those kinds of practices will undermine any argument that it is “practically difficult” to record the time worked.

What Should Employers Do?

Since a class of employees can make claims for unpaid work, including overtime, both the exposure and the legal costs associated with defending against de minimus claims can be high. Take steps to ensure you’re properly paying employees for all time worked, even if it occurs after hours.

Policy no. 1: No off-the-clock work. You should consider having a policy that strictly prohibits off-the-clock work unless you specifically request it. But the policy alone won’t shield you from paying for the work. When you learn employees are working off-the-clock, you must immediately address the issue, including disciplining violators in accordance with your policy.

Policy no. 2: Report any off-the-clock work. You should have a policy that requires employees to report any off-the-clock work immediately. The policy should contain a specific reporting procedure. When an employee works off the clock but fails to report the time as required by your policies, you can then argue you had no knowledge of the work performed and that the failure to pay for the time therefore isn’t an FLSA violation.

The two policies can save you thousands of dollars in unpaid wages and liquidated damages available under the FLSA. But you should also determine whether employees are engaging in off-the-clock work—and why. Is there a business need for those types of activities? If not, you should make efforts to stop the conduct:

  • Advise employees who habitually respond to e-mails in the evening hours not to do so unless specifically instructed.
  • Counsel supervisors and managers not to e-mail nonexempt subordinates during nonworking hours or, alternatively, to state that the e-mails need not be reviewed nor responded to outside of regular working hours.
  • If your business requires employees to check and/or respond to e-mails during nonworking hours, instruct them to report the time worked through your normal pay channels. Monitor the time for excessiveness. It must be compensated.

It’s entirely possible that the DOL will eventually address the issues and provide further guidance. In 2014, it requested submissions regarding “the use of technology, including portable electronic devices, by employees away from the workplace and outside of scheduled work hours.” No rules were proposed, and it’s uncertain whether the issue remains a priority for the agency. For now, employers are encouraged to follow the above steps to ensure compliance and escape liability.

Courtney Bru is a Shareholder at McAfee & Taft. She may be reached at courtney.bru@mcafeetaft.com.