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.

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.

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.