Under the Fair Labor Standards Act (“FLSA”), employees are entitled to compensation for “hours worked.” However, what is considered compensable work time is a contentious topic for many employers. A recent decision by the Supreme Court is likely to help clarify the test for compensable work under the FLSA and effectively end much of the current litigation faced by employers surrounding back wages and overtime pay. This month, in a rare unanimous decision, the Supreme Court held that employees’ time spent waiting for and undergoing security screenings is not compensable under the Fair Labor Standards Act.
The decision centered on an interpretation of the Portal-to-Portal Act, which exempts employers from having to pay employees for activities that are considered “preliminary” or “postliminary” to the employee’s principal work tasks. The plaintiffs in this suit were warehouse workers who retrieved inventory and packaged it for shipment. They were required by their employer to undergo an antitheft security screening before leaving work each day, and were seeking compensation for the time required to complete the screening. The Ninth Circuit previously held that because the security screening was required by the employer, it should be compensated.
The High Court rejected the reasoning of the Ninth Circuit, and instead focused on whether the screening was integral and indispensable to the principal activities that the workers were hired to perform. The Court noted that the appropriate inquiry should be whether the activity “is tied to the productive work that the employee is employed to perform.” In its analysis the Court went on to define what it means for an activity to be “integral and indispensable” and held that it must be an “intrinsic element” of the principal activities that an employee is employed to perform. Further, it must be one “which the employee cannot dispense if he is to perform his principal activities.”
The Court’s analysis and definition of “integral and indispensable” is likely to have a broad impact on various types of preliminary and postliminary activities, not just security clearances. The decision provides employers and lower courts with a standard to employ when assessing the compensability of certain activities performed during the workday.
Additionally, the Court provided guidance on how the FLSA should be applied in other factual scenarios. First, an activity is not compensable simply because it is required by the employer. Second, an activity is not compensable just because it benefits the employer. And third, the fact that an employer could conceivably reduce the time spent on the pre or postliminary activity in question does not affect whether the activity is an “intrinsic element” of the principal activities that an employee is employed to perform. Many employers can take comfort in the Court’s concluding remarks that the foregoing arguments are “properly presented to the employer at the bargaining table, not to a court in an FLSA claim.”