Payroll and Compensation, Your Time or Their Time?

The time that employers must pay for isn't always clear. To help make sense of the confusion, here are answers to some frequently asked questions about when companies have to pay employees based on Labor

What States Require

Most states have labor regulations similar or the same as federal labor regulations. Click here to see what your state labor department requires.

The Supreme Court Weighs In

The Supreme Court took up the issue of compensable time in a case involving employees of meat production and poultry plants who were required to put on protective gear and walk to the production floor at the start of each day. At the end of the day, they had to walk back to the locker room and take off the gear.

The issue before the Court was whether the time walking to and from the production floor should be paid time. The Court held the time to actually "don" and "doff" the gear was compensable, under the Fair Labor Standards Act.

The employees asserted that their workday began once they put on the gear. The employers maintained that the walking time was a commute or a break.

The Justices applied the "continuous workday" principle, which states that compensable time begins with the first principal activity of the day and ends with the last principal activity.

Because wearing the equipment was mandatory, the court ruled that the first and last principal activities were donning and doffing the gear. Time in between was work time that had to be paid for.

   

However, the court ruled against the employees on another issue: Sometimes employees would have to wait until protective gear was available. Applying the same "continuous workday" principle, the court ruled that because "wait time occurred before the first principal activity, the employer wasn't obliged to pay for that time. (IBP, Inc., vs. Gabriel Alvarez, et al, No. 03-1238, Nov. 8, 2005)

Department regulations:

Q.

Do We Have to Pay Employees On Call?

Yes, your company is required to pay employees if you require them to remain on your premises while they wait for an assignment (for example, firefighters waiting for an emergency call). If this is the case, they are considered to be working and must be paid, even if they are doing other things, such as playing cards.

No, you don't have to pay employees if you allow them to go home and they are free to leave messages saying where they can be reached. In most cases like these, the employees are not considered to be working.

Yes, you must pay employees if you allow them to leave but restrict their activities, (such as requiring them to remain close to the workplace or not drink alcohol while on call).

Q.

Do We Have to Pay for Travel Time?

No, you do not have to pay employees for the time they spend commuting back and forth from home.

Yes, you have to pay for travel time if you have maintenance employees who use their own cars every day to travel to your branch offices in neighboring cities. You pay for time between locations.

Q.

Do We Have to Pay for Meal Time and Rest Breaks?

Yes, you do have to pay if the employee continues working during lunch or rest breaks. For example, if your receptionist spends her lunchtime at her desk, answering the phone as usual and has not been relieved of her duties, you do have to pay her for the time. What if she works during lunch breaks against your instructions? It's up to you to enforce the rules.

State laws regulate break periods, including the minimum time required for meals and rest breaks and whether the time must be paid. But even states that don't require paid breaks do require employers to pay employees if job duties are performed during long breaks, such as lunch or rest periods during long shifts.

Q.

Do We have to Pay for Sleep Time?

Yes, you must pay for sleep time if employees sleep less than five hours or are on duty for less than 24 hours. They are considered to be working for those hours, even if they are allowed to sleep or engage in other personal activities during non-busy times.

No, you don't have to pay if your employees work 24 hours or more and you have an agreement that their work hours will exclude bona fide regularly scheduled sleep periods for not more than eight hours - as long as you provide sleeping facilities and they can generally sleep uninterrupted.

About the Americans With Disabilities Act (ADA)

Employers may need to review their policies, procedures and handbooks due to changes in the Americans with Disabilities Act (ADA), which went into effect in 2009. The changes address court and Equal Employment Opportunity Commission interpretations of the law that have, over the years, narrowed certain ADA definitions and generally made application of the ADA more restrictive than Congress originally intended.  

The "Findings and Purposes" section of the legislation cites specific U.S. Supreme Court cases that have led to lower courts "incorrectly" ruling in individual cases that people with a range of substantially limiting life impairments are not people with disabilities. The amendments do retain the ADA's definition of "disability:"
A physical or mental impairment that substantially limits one or more of the major life activities of the individual.

• A record of such an impairment.
• Being regarded as having such an impairment.

However, the amendments add language that provides a non-exhaustive list of major life activities, including routine activities such as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating and working. They also clarify that a major life activity includes the operation of major bodily functions. Furthermore, the amendments specify that the definition of "disability" be construed "in favor of broad coverage." This means, for example, that an impairment that substantially limits one major life activity need not limit other major life activities in order to be considered a disability, and that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.

These provisions address the U.S. Supreme Court case of Toyota Motor Manufacturing of Kentucky v. Williams, which narrowly defined "major life activity" as one that is of central importance to most people's lives. The Williams case also required that, in order for an impairment to be viewed as "substantially limiting" a major life activity, it must prevent or severely limit the individual from performing the activity. The amendments clearly apply a much broader standard for ADA protection to apply.

In Sutton v. United Airlines, the U.S. Supreme Court ruled that mitigating measures, such as medication or devices, must be taken into account in determining whether a person is substantially limited in a major life activity. Under such an interpretation, for example, an individual with epilepsy was not protected by the ADA if he or she took medication that controlled the condition. The amendments specify that, with the exception of ordinary eyeglasses or contact lenses, the determination of whether an impairment substantially limits a major life activity is to be made without regard to the ameliorative effects of mitigating measures. Examples given of such mitigating measures include medication, medical supplies, low-vision devices, prosthetics, hearing aids, mobility devices, oxygen therapy equipment, and the like; use of assistive technology; reasonable accommodations or auxiliary aids or services; or learned behavioral or adaptive neurological modifications.

The amendments also remove some language from the ADA that courts had relied upon to interpret the law narrowly. For example, the original ADA included a finding that approximately 43 million Americans have one or more physical disabilities, and that "individuals with disabilities are a discrete and insular minority." In both the Williams and Sutton cases, the U.S. Supreme Court cited this language to set a strict standard for being protected by the law.

As a result of these changes, many more employees may be considered disabled under the ADA and thus fall under the law's protections, including the requirement that an employer provide reasonable accommodation. With these changes to the ADA, now would be a good time to review your company's policies, procedures and handbooks with your attorney to make sure your company is in compliance with these legal requirements.