Nothing but work, work, work, all the time.1 For many of us, the workday has a set starting point and ending point. And while those points aren’t always set in stone (such as 9 to 5),2 for most workers, they start working sometime after they arrive at work. And for most workers, once they’ve left work, the workday is over. As a result, it’s relatively simple from an employer’s perspective to handle nonexempt employee payroll calculations: clock in, clock out, add up the time and, voila, calculate the paycheck.3 (So why is it that it takes the folks who process payroll so long to do it?)4
But as with all things wage and hour, there are so many exceptions to this relatively easy formula. Indeed, there exist a number of other circumstances in which an employee can be away from work (or not even have arrived at work) yet still be entitled to get paid for the time. And sometimes, that will include times when employees are sitting at home in front of the TV (and I’m not talking about worker’s comp leave, either). Knowing about these particular areas of “compensable time” in advance can help your organization avoid significant wage and hour liability to employee(s).
Commute time
In general, an employee’s commute to and from their place of work isn’t compensable. Thus, when employees drive from home to your workplace, they aren’t ordinarily entitled to be paid for that time. However, there are circumstances in which the commute can become compensable. The first is if you require your employees to report to a central location (such as an office) and then commute to the workplace (for instance, a job site or customer location). In this circumstance, the employees are deemed to have arrived at work when they reported to the central location—not when they arrive at the job site. The time commuting between is considered time worked, and the employees must be paid for it.
Another way in which ordinarily noncompensable commute time becomes compensable working time is if you require employees to be driven to work in company-provided transportation. For instance, if you require employees to be picked up by a company shuttle or van and transported directly to the workplace, the time becomes compensable under the theory that your requirement is so restrictive of what an employee may do that it’s considered time worked. This is true even if the employees read, sleep or converse during the entire commute. However, if you give employees the option of commuting on their own or using, for instance, a van pool, the time is likely not compensable—even if the employee chooses to take your transport.
On-call or standby time
A number of employers place employees “on-call” or on “standby” during periods when the employee is not at the workplace—for instance, to respond to emergencies or immediate client needs. Whether or not an employee must be paid for on-call time, however, depends on how restrictive the employer’s rules are about what types of conduct an employee may engage in while on call. The factors used to determine whether the time is “controlled”—meaning you have to pay for it—include geographical limitations, industry practice, required response time and ability of employee to engage in personal pursuits. Thus, if you require your employee to remain within a half-hour of the worksite, abstain from certain recreational pursuits and respond to any call within that half-hour, the time is likely compensable. If, on the other hand, the employee has to simply wear a pager and check in if called, the time is not likely compensable. Employers whose employees are subject to controlled standby can alleviate some of the costs associated with the additional work time by paying a different rate of pay for on-call time than for working time.5
After hours
In the good old days, before cell phones and BlackBerry devices, once you got away from work, you didn’t get phone calls from customers and coworkers. Today, however, is light years from yesteryear—and now, connectivity rules supreme. As a result, your employees get work email, phone calls and other contact that they respond to—all “after hours.” And when they do, and when they respond or do other tasks that are to the benefit of your organization, they’re working and are entitled to compensation if the work that’s done is more than “de minimis.” So, before developing a culture of 24/7 connectivity, you’d be wise to evaluate whether your nonexempt employees are really needed to engage in such tasks with such incredible response time or whether it can wait until normal business hours.
Keep in mind that each of these types of “work” can have significant benefits for certain organizations—benefits that ultimately might outweigh the costs involved. Being cognizant of the potential wage costs involved will let you make an accurate determination of whether these types of issues will provide you the benefits you’re seeking.
1 "The Princess Bride” (1987)
2 Boy, do I wish!
3 Of course, this is an oversimplification because, in California, nothing is this easy. Remember, you must have workers clock in and out for their requisite meal period(s).
4 Send hate mail to jfadda@northbaybiz.com. [Editor’s note: Don’t you dare.]
5 Consult with counsel in doing so—there are pitfalls to be avoided here as well.
