What exactly is ‘de minimis’? How to address off-the-clock work in light of modern technologies

Smartphones have changed the employment landscape. Non-exempt employees can communicate via text or email any time of day or night, and may be expected to. My habit in the evenings is to check my work email, even if only to get a sense of what the next morning may bring. If a response is needed immediately, I’ll respond that evening. If I’m out-of-pocket the following morning, I’ll respond that evening. Non-exempt employees regularly engage in this type of activity after working hours, even if not required by their employers. But are employers obligated to pay for these activities?

The answer depends on the application of two legal principles. First, did the employer know that the employee was working off-the-clock? Second, was the time spent working de minimis?

Compensability of off-the-clock work

As a general rule, yes, employers must pay for work that occurs outside of regularly scheduled working hours. Under Fair Labor Standards Act (FLSA) regulations, if an “employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.” 29 C.F.R. § 785.112. It does not matter if the work was specifically requested, or even authorized. 29 C.F.R. § 785.111. It does not matter if the employer has a policy prohibiting off-the-clock work.

Let’s assume an employee responds to a couple of work-related emails while sitting on the couch in the evening. There is no expectation that he do so, and he was not specifically asked to respond outside of working hours, but his responses were sent to supervisors or managers. In this situation, the employer, through its supervisors, has knowledge that this employee is working off-the-clock. It must pay for the time spent working.

Compensability of ‘de minimis’ work

The second question is a bit less certain, and a bit more complicated. Back in 1946, the U.S. Supreme Court endorsed the use of a “de minimis rule” when considering whether the amount of time worked was so small as to be “negligible,” and therefore not requiring payment. According to the Supreme Court, “[w]hen the matter in issue concerns only a few seconds or minutes of work beyond scheduled working hours, such trifles may be disregarded.”

The U.S. Department of Labor has adopted a similar, but not identical, principle. One of its FLSA regulations provides that “insubstantial or insignificant periods of time beyond the scheduled working hours . . . may be disregarded.” See 29 C.F.R. § 785.47. However, the regulation contains at least three limits on application of this principle:

  1. There must be practical administrative difficulties in precisely recording the time for payroll purposes.
  2. The time worked must consist of “uncertain and indefinite periods of time involved of a few seconds or minutes duration.”
  3. An employer may “not arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time or practically ascertainable period of time he is regularly required to spend on duties assigned to him.”

Notably, the regulation cites to various 1950s-era cases finding that “working time amounting to $1 of additional compensation a week is ‘not a trivial matter to a workingman,’” and 10 minutes per day is not de minimis.

Courts will generally analyze three factors to determine whether time worked should be considered de minimis and not compensable: (1) the administrative difficulty in recording the time, (2) the aggregate amount of time worked without compensation, and (3) whether the work is of a type performed on a regular basis.

While there are numerous court opinions finding time of less than 10 minutes is de minimis, there is growing doubt about the rule’s continued application. For instance, the U.S. Supreme Court recently declined to apply it, noting the FLSA specifically requires employers to compensate employees for relatively insignificant periods of time connected to the employees’ primary work tasks. In addition, employers are strongly advised not to focus solely on the amount of time worked. This is only one factor to be considered. Modern technologies are changing whether and how employers can track this time for payroll purposes. For instance, software allows employees to clock in and out remotely, or even on their cell phones. Such practices will undermine any argument that it “practically difficult” to record the time worked.

What should employers do?

Claims for unpaid work, including overtime, can be made by a class of employees, and both the exposure and the legal costs associated with defense can be high. Employers should take steps to ensure that they are properly paying employees for all time worked, even if it occurs after hours.

First, every employer should consider having a policy that strictly prohibits off-the-clock work unless specifically requested. But this policy alone will not shield an employer from paying for off-the-clock work. When employers learn of employees working off-the-clock, they must immediately address the issue, including disciplining employees as per the policy.

Second, every employer should have a policy that requires employees to immediately report any off-the-clock work. This policy should contain a specific procedure for reporting such work. When an employee works off-the-clock, but fails to report the time as required by applicable policies, the employer can argue it had no knowledge of the work performed, and the failure to pay for any such time worked is therefore not a FLSA violation.

These two policies can save employers thousands of dollars in unpaid wages and liquidated damages available under the FLSA. But employers should also determine whether employees are engaging in off-the-clock work – and why. Is there a business need for these types of activities? If not, the employer should make efforts to stop the conduct. For instance, employees who habitually respond to emails in the evening hours may be advised not to do so unless specifically instructed. Supervisors and managers may be counseled not to email non-exempt subordinates during non-working hours, or to specifically state in any emails sent that the emails need not be reviewed nor responded to outside of regular working hours. If the business requires employees to check and/or respond to emails during nonworking hours, employees must be specifically instructed to report such time worked through normal pay channels. That time should be monitored for excessiveness. It must be compensated.

It’s entirely possible that the U.S. Department of Labor will eventually address these issues and provide further guidance. In 2014 it requested submissions regarding “the use of technology, including portable electronic devices, by employees away from the workplace and outside of scheduled work hours.” No rules were proposed, and it is uncertain whether this remains a priority for the Department. For now, employers are encouraged to follow the steps above to ensure compliance and escape liability.