FLSA Compensable Hours & Hours Worked Auditor

Fair Labor Standards Act (FLSA) Hours Worked and Compensable Time Regulations

One of the most persistent and expensive litigation risks in employment law stems from the definition of "hours worked" under the Fair Labor Standards Act (FLSA). While calculating wages for active on-the-job tasks is straightforward, disputes regularly arise over non-productive, preparatory, or travel activities that occur immediately before, during, or after an employee's primary shift.

1. The Continuous Workday and Pre/Postliminary Activities

Under the Portal-to-Portal Act (amended in 29 U.S.C. § 254), employers are generally exempt from paying for travel to and from work (commuting) and activities that occur "preliminary" or "postliminary" to the principal workday. However, under the continuous workday doctrine, any activity that is "integral and indispensable" to the principal work of the employee represents compensable hours worked.

As established in the Supreme Court landmark case Steiner v. Mitchell (1956), putting on (donning) and taking off (doffing) highly specialized, protective, or safety gear essential for a job in highly hazardous conditions is a compensable principal activity. Conversely, dressing in standard uniforms or safety goggles that can be put on at home is non-compensable. Similarly, in Integrity Staffing Solutions v. Busk (2014), the Supreme Court held that mandatory post-shift security screenings are non-compensable under federal law because security checks are not "integral and indispensable" to the warehouse workers' primary task of sorting goods.

However, California law completely departs from federal standards on this point. In Frlekin v. Apple Inc. (2020), the California Supreme Court ruled that because employees are subject to the "control" of the employer during mandatory security and bag inspections, all screening times are fully compensable under California Wage Orders. Employers in California, Pennsylvania, and other worker-protective states must pay for security screening times to prevent massive class-action back-pay claims.

2. Travel Time Calculations and Rules

The compensability of travel time is governed by 29 CFR Part 785 (Subpart C), which divides travel into four distinct categories:

• Home-to-Work Commute (29 CFR § 785.35): Standard commuting from home to work is not hours worked. This remains true even if the employee uses an employer's company vehicle, provided the travel is within the normal commuting area and the vehicle use is governed by a mutual agreement.
• Special One-Day Assignments Out of Town (29 CFR § 785.37): When an employee who works at a fixed location is required to travel to a different city for a special one-day assignment, all of that travel is compensable. However, the employer is allowed to subtract the employee's standard daily home-to-work commute time to calculate the net compensable travel hours.
• Travel that is All in a Day's Work (29 CFR § 785.38): Travel between job sites during the continuous workday is fully compensable work time. For example, travel from a dispatcher office to a client home, or travel between client offices, represents hours worked.
• Overnight Travel (29 CFR § 785.39): Under federal rules, travel that keeps an employee away from home overnight is compensable ONLY when it cuts across the employee's regular working hours (on both regular workdays and scheduled days off, such as weekends). Travel as a passenger outside of regular working hours is non-compensable, unless the passenger is actively performing work. Crucially, driving a vehicle is always considered active work, meaning a driver must be compensated for all hours spent driving, regardless of the time of day.

3. Training, Meetings, and Seminars (29 CFR § 785.27)

Attendance at lectures, corporate training, webinars, and meetings must be paid unless all four of the following criteria are met:

1. Attendance is held entirely outside of the employee's regular working hours.
2. Attendance is completely voluntary (no disciplinary actions or direct career penalty if they do not attend).
3. The training is not directly related to the employee's current job duties. (It is considered job-related if it is designed to make the employee perform their current job more efficiently, rather than training them for a completely new, separate career).
4. The employee performs no productive, real-world work during the training (such as processing accounts or manufacturing parts).

If any single criterion fails, the entire time spent in the meeting or training is compensable hours worked and must be paid at the employee's regular rate (or overtime rate, if cumulative weekly hours exceed 40).

4. On-Call and Standby Time (29 CFR § 785.17)

On-call hours are evaluated based on whether the employee is "engaged to wait" (compensable) or "waiting to be engaged" (non-compensable).

• On-Premises On-Call: If the employee is required to remain on the employer's premises (or in extremely close proximity, preventing them from returning home or engaging in personal activities), all hours are 100% compensable hours worked.
• Off-Premises On-Call: If the employee can wait at home or travel within a reasonable area, the time is only compensable if the personal restrictions are highly severe. Courts evaluate factors such as:
  • The required response time (response times of under 15 minutes are highly restrictive and often deemed compensable).
  • The average frequency of callbacks (if the employee is interrupted multiple times per hour, they cannot use the time for personal activities).
  • Geographical boundaries (whether they are locked to a specific zip code).
  • Whether they can easily trade shifts or decline calls.

5. Statutes of Limitations, Willfulness, and Liquidated Damages

Under the Fair Labor Standards Act, claims for unpaid wages and overtime are subject to a strict statute of limitations:

• Standard Violation (2 Years): Claims must be brought within two years of the unpaid hours occurring.
• Willful Violation (3 Years): If the plaintiff can show that the employer knowingly violated the law, or showed reckless disregard for whether its conduct was prohibited, the statute of limitations is extended to three years, expanding back-pay liabilities by 50%.
• Mandatory Liquidated Damages (Section 16(b)): Under the FLSA, an employer who violates wage laws is automatically liable for an equal amount in liquidated damages (commonly referred to as "double damages"). To avoid liquidated damages, the employer must prove to a judge that it acted in "good faith" and had "reasonable grounds" to believe it was compliant—a very high standard that is rarely met without documented consultation with specialized labor counsel.