Do I Have to Pay for That?
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Do I Have to Pay for That?

Do I Have to Pay for That?

Karen DiGioia, February 15th, 2017

You probably have a pretty good sense of which employees at your organization qualify for exemption under the FLSA and which do not. You also know that those employees who don’t qualify for exemption – your nonexempt or hourly employees – must, by law, be paid time-and-a-half for any hours worked in a workweek over 40 and also must receive at least the minimum wage. (if you’re not clear on any of those things, drop me an email and I’ll be happy to assist).

But – do you know what counts as “hours worked” and what doesn’t?

I’m going to work from the assumption that the answer to this question, at best is “maybe” and spend this some time talking about what counts as “compensable time” under the FLSA.

On the surface, it sounds simple. Work time is time when an employee works, right? But what about rest and meal times? Time worked that you didn’t approve? On-call time? Time waiting to work? Travel time?

Let’s start with a quiz. I’ll present each of the areas that will be covered later in this article. You indicate whether or not you think you are required to pay an employee for the time. After you finish the quiz, continue reading and see how you did. (No cheating!)

Time SpentYesNoMaybe
Time worked but not approved
Meal Time
Break Time
On-call Time
Waiting Time
Lectures, Meetings, and Training Programs
Travel Time
Sleeping Time
Time Away at a Multi-day Seminar

Time worked that wasn’t approved: Yes

An employee who works, even without approval, must be paid for the time. You can have a policy that states that employees are not to work overtime (or even regular time) without management approval, but, if they work you must pay them. If an employee doesn’t adhere to this policy, this can be handled as a performance issue – but you still must pay for the time!

Meal time: No

Meal periods (mostly commonly 30 minutes or longer) during which an employee is completely relieved of duty does not require compensation. Be careful, though. If an employees is performing any work duties while having their meal, either actively (like filing papers while eating their lunch) or inactively (like waiting at the phone in case calls come in), the time must be paid.

Break or rest time: Yes

Rest or break times of 20 minutes or less must be counted as hours worked. Providing employees with break periods is, generally, not required but doing so is considered “best practice” and increases the efficiency of employees.

On-call time: Maybe

It depends on how the employee can spend their time when “on call”. If they must remain at the worksite while “on call,” the time must be paid. If they are able to spend their “on-call” time freely – leaving home or work as long as they are “reachable,” if needed – it is not considered work time (until they actually receive a call at which point they then ARE working) and does not require pay. However, if an employee has constraints on how they can spend the “on-call” time (for example: must stay at home where they have access to their computer), they must be compensated.

Waiting time: Maybe

According to the FLSA, it depends on whether an employee is “engaged to wait” or “waiting to be engaged.” (Honestly, I don’t make this stuff up.) Some examples of employees who are “engaged to wait” would be an administrative assistant who is reading a book while waiting for a letter to type and send or a customer service representative who is checking personal email while waiting for customer calls to come in. In both of these cases, the time spent reading or on email must be paid. While it’s always best to have other work available for employees to do while they are “waiting,” if you don’t, you still need to pay them.

In the case of an employee who is “waiting to be engaged,” compensation is not required. To meet this definition:

  • The employee must have been fully relieved of their duties and be free to use the time as they choose
  • The employee must have been told in advance
  • The employee must know when they need to next show up for work, and
  • The break in time needs to be long enough for the employee to be able to effectively use it for their own purposes.

If all these requirements are met, the employee is “waiting to be engaged” and the time would not need to be paid.

Lectures, Meetings, and Training Programs: Maybe

Yes, “maybe” again. All these “maybes” is what makes this such a complex topic. If four criteria are met, the time doesn’t need to be paid:

  • Outside of normal work hours
  • Voluntary
  • Not job related
  • No other work is performed at the same time

If all four criteria aren’t met, the time must be paid.

Travel Time: Some Yes and Some No

Home to work travel: No

This one is clear and straight forward. You do not need to pay your employees for time they spend getting to work and going back home.

Travel that all falls into a day’s work: Yes

If an employee is traveling between job sites, is working in another city for the day and then returning home the same day or going out in the middle of the day to pick up supplies or deliver something to a customer, this is time worked and must be paid.

Travel away from home: Yes and No

If an employee travels away from home and that travel time covers more than one work day, travel time counts toward hours work if the time spent traveling (car, plane, etc…) occurs during the employee’s normal work hours. If the travel time is before or after “normal” work hours, then the time does not have to be paid (unless the employee is doing work while they are travelling, like making work phone calls, writing, or reviewing reports, preparing presentations, etc.…).

If an employee travels on a non-workday (generally a weekend), the travel time must be paid if the hours fall between the times that they would normally be working on a normal workday. This mean that if an employee who usually works Monday through Friday from 8:30 – 5:00 is travelling between 10:00 and 2:00 on Saturday, that time must be paid. If the travel time covers the entire normal workday time period (8:30 – 5:00) the full time would be paid but time normally given for meal breaks could be deducted.

However, if an employee is traveling to Chicago in a train headed westbound going 75 mph and another employees is leaving Chicago at the same time heading eastbound in another train… Oops. I’m sorry. Brief flashback to a middle school algebra quiz…

Sleeping Time: Maybe (yes, that answer again)

If an employee is required to stay “on duty” for less than 24 hours but is, for some reason, permitted to sleep when they are not busy, they are considered to be working and must be paid. The only exception is for “on duty” periods in excess of 24 hours for which an employer has an agreement with the employee that sleep time (which must be in excess of 5 hours) will be unpaid and for which adequate sleeping facilities are provided by the employer so that the employee can actually have an uninterrupted night’s sleep. While this is unlikely to apply to many industries and small businesses, it’s possible that, in the event of an upcoming bad weather event, an employee might be asked to sleep on site so that the organization could open the next day. If that happens, you now know the pay implications of this situation.

Time Away at a Multi-day Seminar: Yes and No

“What,” you may ask, “about a situation that combines many of the above categories? What if a non-exempt employee attends a multi-day seminar? What do I have to pay for then?”

If we apply many of the sections above, the employee would be paid for any time travelling that cuts across the regular workday (or corresponding work hours during a nonworking day) and for all time worked, while they are away, including time in the seminar and other related “work” activities. You are not required to pay them for time spent at the hotel (unless they are also working while at the hotel), time at restaurants, time sleeping, time at the pool, time at the hotel gym – you get the idea.

So – how did you do on the quiz? Better than I did on that middle school algebra quiz? Hopefully this article has made you aware that the answers to the question “Do I have to pay for that?” are not always clear. While it’s possible that you are more confused now than you were before, the important thing to realize is that when stepping outside normal “work” definitions, you should always determine if you have to “pay for that.” When in doubt, the U. S. Department of Labor website provides many resources which can answer your questions. Or, drop me an email. I’ll be happy to assist.

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