Hours Worked: To Suffer or Permit. . . . Who Talks Like That?

Now before we get into today’s post I do want to point something out.  For the next several weeks we are going to be talking about things like working time and what makes up hours worked and overtime and how it is computed.  Of course, when talking about these topics we are talking about how they apply to your NON-EXEMPT workforce.  Your Non-Exempt workforce are those employees who are entitled to overtime and generally, although not always, get paid by the hour.  Concepts like hours worked and waiting time and rest and meal periods don’t apply to your Exempt workforce, they are always working and always getting paid (well almost always, we will talk about that too).  So for now just remember, until we say otherwise, we are talking about Non-Exempt employees.

When last we left off, we were talking about “employers” and “employees” and “employ” and “suffer or permit” and hoping that the courts would help, because the law and regulations were not helping much at all.  Well, the courts do help a bit.  And we left off with Rutherford Food Corp., defining the employer/employee relationship.  And that is important, because as you now know, the FLSA does not apply unless there is an employer/employee relationship.  So, what exactly does “suffer or permit” mean?

According to the regulations:

The United States Supreme Court originally stated that employees subject to the act must be paid for all time spent in ‘physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.’ (Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, 321 U. S. 590 (1944).) Subsequently, the Court ruled that there need be no exertion at all and that all hours are hours worked which the employee is required to give his employer, that ‘an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen. Refraining from other activity often is a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself, and time spent lying in wait for threats to the safety of the employer’s property may be treated by the parties as a benefit to the employer.’ (Armour & Co. v. Wantock, 323 U.S. 126 (1944); Skidmore v. Swift, 323 U.S. 134 (1944)) The workweek ordinarily includes ‘all the time during which an employee is necessarily required to be on the employer’s premises, on duty or at a prescribed work place’. (Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946).) The Portal-to-Portal Act did not change the rule except to provide an exception for preliminary and postliminary activities. See §785.34.

29 CFR § 785.7.

Now that is not a bad definition and it puts some limits on when you have to pay an employee.  Pretty wide limits, but limits.  And the explanation uses a word I like, “required.”  So if an employee is not “required” to be working, but they work anyway I don’t have to pay them right?  NOT SO FAST.  In fact, permission or not, if you know someone is working or have a reason to know that they are working and you benefit from that work, you have to pay that employee.  Remember, “to suffer or permit.”  Now I know what you are saying:  “Just wait one second Mr. Palazzolo (OK at this point you are probably not calling me Mr. Palazzolo, but I can’t use foul language on this thing), I have a policy, its even in my employee handbook, and that policy says that my employees can’t work overtime unless I approve it first. You mean to tell me I have to pay these employees anyway?”  Well, the simple answer to that question is yes, you do.  And there is a reg. for that:

Work not requested but suffered or permitted is work time. For example, an employee may voluntarily continue to work at the end of the shift. He may be a pieceworker, he may desire to finish an assigned task or he may wish to correct errors, paste work tickets, prepare time reports or other records. The reason is immaterial. The employer knows or has reason to believe that he is continuing to work and the time is working time. (Handler v. Thrasher, 191, F. 2d 120 (C.A. 10, 1951); Republican Publishing Co. v. American Newspaper Guild, 172 F. 2d 943 (C.A. 1, 1949); Kappler v. Republic Pictures Corp., 59 F. Supp. 112 (S.D. Iowa 1945), aff’d 151 F. 2d 543 (C.A. 8, 1945); 327 U.S. 757 (1946); Hogue v. National Automotive Parts Ass’n., 87 F. Supp. 816 (E.D. Mich. 1949); Barker v. Georgia Power & Light Co., 2 W.H. Cases 486; 5 CCH Labor Cases, para. 61,095 (M.D. Ga. 1942); Steger v. Beard & Stone Electric Co., Inc., 1 W.H. Cases 593; 4 Labor Cases 60,643 (N.D. Texas, 1941).)

29 CFR § 785.11(emphasis added).

Wow, I told them not to work, they did it anyway, and I still have to pay them?  Yep.  You can discipline them for ignoring your instructions, but you still have to pay them.  And doesn’t that put you in an interesting position?  You have an employee that cares so much that they are willing to work without getting paid and your only option is to discipline them.  Nice.  Now before you panic, there are some limits to this rule and the courts have from time to time given employers a break, but this is the general rule.  So keep that in mind when a non-exempt employee is answering work emails at 10 p.m.

And by the way, it doesn’t even matter where the employee did the work.  In the office, pay them.  At home, pay them.

The rule is also applicable to work performed away from the premises or the job site, or even at home. If the employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.

29 CFR § 785.12.

And by the way, it is your job as a manager to make sure that you know when employees are working and when they are not.

In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.

29 CFR § 785.13 (emphasis added).

Confused yet?  No, of course not.  But how do you know or how should you know if an employee is working when they should not be?  Back in the old days you had to guess a bit.  For example, if an employee was doing 10 hours’ worth of work but only recording 8 hours of time, you might get suspicious.  Or if you saw them doing the work or would have been in a position to see the employee doing the work, you might get suspicious.  Let me give you an example.  Way back when, before I went to law school, I worked in an industrial bakery.  Every day a guy named “Mike” (we will call him Mike anyway) came in a half hour or so early, did not punch the clock and went out to the bagging lines where we worked and set up all three bread bagging machines.  Everybody in the place knew Mike was doing this.  I mean these machines did not set themselves up, right?  Mike never got paid for that work.  He should have been.  These days it is even easier to know if an employee is working.  Often they are signed on to a computer or sending emails with a time stamp or there is some other computer-based way to monitor what employees are doing.

So, do you have employees working “off the clock”?  I’m sure not, but if you do you better either stop them or pay them.

Next time.  When do you pay an employee who is waiting to work?