Determining what is or is not paid time under the Fair Labor Standards Act (FLSA) is no easy undertaking for employers. Whether the time involves preparatory tasks, or activities performed after the conclusion of a shift, employers face a difficult assignment in drawing the line between what activities should and should not be compensated. Fortunately, the U.S. Supreme Court handed down a unanimous decision yesterday that provides the guidance employers need.
The decision, Integrity Staffing Solutions v. Busk, is being lauded as a major victory for employers. Integrity Staffing is a warehousing contractor that companies such as Amazon.com hire to fulfill product orders. In an effort to prevent employee theft, Integrity Staffing requires its employees to undergo a security screening process at the end of their shifts. This screening process takes up to 25 minutes to complete – and is unpaid. Two Integrity Staffing employees filed a collective action alleging that they were owed compensation under the FLSA for this screening process time. The Ninth Circuit Court of Appeals agreed with the employees’ theory and found that the security screenings were an integral part of the warehousing job which must be paid.
In a unanimous decision, however, the Supreme Court reversed and held that the employees were not entitled to compensation for time spent going through the security process after their shifts. Ultimately, the Court found that the screening process was not a “principal activity” of the workers’ jobs under the FLSA. Key to this determination was the finding that the screening process was not “integral and indispensable” to the activities that the employees were hired to perform because the screening process did not constitute an “intrinsic element” of the workers’ principal activities. The Court found it critical that the screening process could have been eliminated without impairing the employees’ ability to perform their work.
The key take-away from the Supreme Court’s decision is that to be compensable an activity must be “an intrinsic element” of the job―meaning an activity “with which the employee cannot dispense if he is to perform his principal activities.” Perhaps as important as the legal test adopted by the Supreme Court is the legal test that it rejected. Namely, Integrity Staffing’s employees urged the Court to hold that because the screening process is required by the employer, and the employer benefits from the security process, it is a principal activity of the job. Sensibly, the Supreme Court rejected this argument and expressly stated that the inquiry regarding whether compensation is required does not turn on whether an employer mandates a particular activity. Had the Supreme Court been persuaded by this reasoning it is difficult to fathom how expansive the flood of accompanying litigation would have been. Thankfully for employers faced with the unenviable task of determining what exactly constitutes work time, the Supreme Court opted to go in a more sensible direction and provide all of us some much needed guidance going forward.