BLOGS: Fair Labor Standards Act Law

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Wednesday, January 28, 2015, 8:21 AM

U.S. Supreme Court Rules That Time Spent In Mandatory Security Screening at the End of a Workday Is Not Compensable

The United States Supreme Court issued an interesting decision last month on whether employees who are required to undergo security screening after their work was done should be paid for that time. The Supreme Court found in favor of the employer, and concluded that workers did not have to be paid for that that time because the screening was a non-compensable “postliminary” activity under the Portal-to-Portal Act.

In Integrity Staffing Solutions, Inc. v. Busk, the employer was a company that provided staff to work in warehouses for the online giant, Amazon. A group of workers filed a class action in 2010 against the staffing company seeking unpaid wages under the FLSA. According to their complaint, workers were required to pass a security screening at the end of the day in order to deter theft of product from the warehouse. The workers alleged that it could take workers up to 25 minutes to compete the screening process, for which they were not paid. Because the screening was allegedly necessary and for the employer’s benefit, the workers claimed they should have been compensated for the time.

Initially, the federal district court dismissed the workers' case for failing to state a viable legal claim. The district court ruled that the security screening was a non-compensable "postliminary" activity under the Portal-to-Portal Act because it was not an "integral and indispensable part of the warehouse duties the workers were hired to perform. The U.S. Court of Appeals for the Ninth Circuit disagreed and reversed, holding that the screening was a postliminary activity, but was compensable because it was necessary to the warehouse work and for the benefit of the employer. The employer successfully petitioned the U.S. Supreme Court to hear the case.
In a unanimous opinion written by Justice Thomas, the Supreme Court reversed. The Court started with the proposition that the Portal-to Portal Act makes noncompensable "activities which are preliminary to or postliminary to said principal activity or activities" of a worker’s job. Citing its long-standing interpretation of the Act, the Court stated that “the term ‘prin­cipal activity or activities’ [embraces] all activities which are an ‘integral and indispensable part of the prin­cipal activities.’”

The Court held that under the Portal-to-Portal Act, employers were not required to pay workers for postliminary activities that were not integral to the workers' warehouse duties. In a succinct analysis, the Court concluded:
The security screenings at issue here are noncompensa­ble, postliminary activities. To begin with, the screenings were not the “principal activity or activities which [the] employee is employed to perform.” 29 U. S. C. §254(a)(1). Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from ware­house shelves and package those products for shipment to Amazon customers.

The security screenings also were not “integral and indispensable” to the employees’ duties as warehouse workers. As explained above, an activity is not integral and indispensable to an employee’s principal activities unless it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to per­form those activities. The screenings were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment. And Integrity Staffing could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.
As savvy HR professionals and in-house counsel know, this case does not create a blanket rule that renders noncompensable every activity after a worker leaves his or her work station. Each situation is different and will generally require a detailed analysis of the particular facts. Indeed, in this case, it took about half a decade in the federal courts to come to a final answer.

The case is a relatively straightforward read, and contains a good history and discussion of the Portal-to-Portal Act. For those who are interested, the Supreme Court's decision can be found here.

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Thursday, January 22, 2015, 8:57 AM

Because you are asking . . . DOL Says New Proposed Rule On White Collar Exemptions Under The FLSA Will Be Issued In February 2015

As many of you know, last year President Obama directed the DOL to issue new regulations to “modernize and streamline” the white collar exemptions to the minimum wage and overtime requirements under the FLSA.  (Keep in mind that under federal rulemaking procedures, the DOL will first issue a “Notice of Proposed Rulemaking” and allow a period of public comment before issuing a final rule.)  We have been waiting for the proposed rule so that we can see what changes the DOL has in mind for these key provisions of the FLSA, which are expected to revise the current regulations for the executive, administrative, and professional exemptions.

Initially, the DOL said the proposed rules would be issued last Fall, but the DOL later announced the notice would be delayed.  Currently, the DOL’s expected release date is sometime in February 2015, according to a notice from the Office of Management and Budget.  Like you, we will be watching closely for these highly anticipated rules which (if finalized) are likely to significantly impact workers and businesses.

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Monday, January 19, 2015, 2:51 PM

Florida Joins U.S. DOL’s Worker Misclassification Initiative

On January 13, 2015, the U.S. Department of Labor announced that Florida joined the ranks of states that have entered into formal agreements with the DOL to share information about worker misclassification.  Under the terms of a memorandum of understanding, the DOL and the Florida Department of Revenue agreed to share information about workers who may be improperly classified as independent contractors instead of employees.  The announcement can be found here.

Workers who are misclassified as contractors may be denied benefits, minimum wage, and overtime pay that they might receive if properly classified as employees.  Likewise, the federal government and state taxing authorities miss out on payroll and other taxes that they would receive if the workers were properly classified. 

By sharing information, the DOL and the states participating in the initiative hope to reduce misclassification and increase compliance with employment, wage and hour, and tax laws.  The DOL reports that similar memoranda of understanding have been entered into with the states of Alabama, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.

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Monday, January 14, 2013, 3:20 PM

New Year Resolutions for North Carolina Staffing Firms (A Legal Perspective)

Like most of us, recruiting and staffing firms prioritize their New Year resolutions to ensure a prosperous and successful year. Here are a couple of legal compliance issues to keep in mind when considering your “resolutions” as you kick-off the New Year:

As you are aware by now, North Carolina law requires some private employers to use the federal E-Verify program to verify the work authorization of all new hires. As of January 1, 2013, private businesses with more than 100 employees are required to enroll in the Internet-based E-Verify system.

The E-Verify program is operated by the Department of Homeland Security in partnership with the Social Security Administration. It verifies a new hire’s work eligibility by comparing the employee’s I9 Form information with the Social Security Administration’s database. It is free, and it has been designed to be user-friendly for employers.

The final phase of the NC E-Verify law goes into effect on July 1, 2013 and requires private business with more than 25 employees to enroll in the E-Verify system. North Carolina businesses should be aware of the E-Verify requirements including recordkeeping requirements for storing and retaining E-Verify results and the I9 Form.

Fair Credit Reporting Act (FCRA)
Beginning January 1, 2013, businesses, including staffing firms, must begin using new FCRA forms to notify applicants and employees of their legal rights. FCRA sets forth the procedural requirements that employers must adhere to when conducting background checks through Consumer Reporting Agencies. A Consumer Reporting Agency (“CRA”) is any third party that handles your background checks for new hires.

While there are no substantive changes to the FCRA forms (which consist of the consent form for obtaining a background check, preadverse decision notification, and adverse action notification), the forms must be updated to reflect that the Consumer Financial Protection Bureau has taken over enforcement of FCRA (which was previously handled by the Federal Trade Commission).

While a legal forecast for 2013 cannot be fully addressed in this article, we will touch upon some of the 2013 legal trends facing employers at the NCASP Annual Spring Conference (April 25-27, 2013).
The new E-Verify and FCRA requirements went into effect on January 1, 2013. Accordingly, all North Carolina employers should be prepared to comply with these changes immediately.

This article first appeared in the Jan./Feb 2013 issue of
Staffing Now, the North Carolina Association of Staffing Professionals (NCASP) Ezine.

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Monday, November 26, 2012, 3:03 PM

Wage and Hour Claims: Is the Staffing Industry a Target for the Department of Labor and Plaintiffs’ Counsel?

This article first appeared in the November/December 2012 issue of Staffing Now, the North Carolina Association of Staffing Professionals (NCASP) Ezine.

The number of wage and hour lawsuits filed in the United States is dramatically increasing, with thousands of federal wage and hour claims brought against employers so far this year. The increase is due in large part to the weak economy and high unemployment rate. These lawsuits arise primarily out of the Fair Labor Standards Act (the “FLSA”) which is the federal law governing minimum wage, overtime pay, recordkeeping requirements, child labor standards, and equal pay in employment. Wage and hour claims can also arise under state law, and, recently, we have seen a “hybrid” of cases consisting of both federal and state law claims. Not surprisingly, the staffing industry has been impacted by this rapid rise in wage and hour claims.

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Tuesday, August 28, 2012, 12:20 PM

Jill Benson to Speak on EEOC Enforcement Guidance

RALEIGH, N.C.—Womble Carlyle Labor & Employment attorney Jill Benson will speak to the Triangle Technical Recruiters Association on Oct. 11th. Benson will speak on “EEOC Enforcement Guidance: Consideration of Criminal History under Title VII of the Civil Rights Act.”

The luncheon event takes place at the North Carolina State University Club in Raleigh.

Jill Benson is an experienced labor and employment litigator who represents employers in a wide range of labor and employment issues, including: Wage and hour claims (Fair Labor Standards Act and state wage and hour laws); Leave of absence issues, including Family Medical Leave Act, military leave and paid time off concern; Anti-discrimination disputes, including those involving Americans with Disabilities Act claims, as well as claims involving alleged discrimination on the basis of race, gender, religion or age; Trade secrets and employee non-compete cases; and Whistleblower retaliation claims. She practices in Womble Carlyle’s Greensboro, N.C. office.

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Monday, June 18, 2012, 10:59 AM

Jill Benson to Speak on Family and Medical Leave Act

Womble Carlyle attorney Jill Benson will speak on “Family and Medical Leave Act—What You Should Know” to members of the Legal Support Staff of Greensboro.

Benson’s discussion takes place from noon-1 p.m. on Tuesday, July 31st at Womble Carlyle’s Greensboro Office, 300 N. Greene Street, Suite 1900, in Greensboro.

For more information, contact Kristen Saunders at or (336) 574-8048.

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