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That 1 A.M. Cell Phone Call to a Worker May Require Overtime Pay (1)

Jan. 28, 2019, 11:15 AMUpdated: Jan. 28, 2019, 7:20 PM

Mobile devices let employers reach workers 24/7, to the point some may expect their people to respond anytime day or night.

But that access may come at a price: requiring employers to shell out for the time and expense or face potential class litigation over unpaid wages or other costs.

Starbucks Corp. and its Evolution Fresh subsidiary recently settled an overtime lawsuit brought by delivery drivers who say they weren’t compensated for company calls they took outside of their shifts. ABM Industries, meanwhile, is on its way toward a $5.4 million settlement over claims it didn’t reimburse cleaners for data and cell phone costs associated with clocking in and out and other work requirements.

Legal uncertainties complicate when employers must pay workers for after-hour calls and emails. Determining what’s legally known as “compensable time” first depends on which law is at play—the federal Fair Labor Standards Act or a state equivalent. The inquiry then turns to whether the employees are covered by the law—which generally protects hourly workers—and whether their work is considered “de minimis,” or otherwise too infrequent or insignificant to require pay.

“These cases are inherently fact-specific, and you will have courts coming down on different sides,” Jennifer T. Williams, a management-side attorney for Cozen O’Connor in Miami, told Bloomberg Law. “What one court thinks is de minimis and non-compensable—if you tweak that set of facts by the smallest of margins I see a different court on a different day reaching a different decision.”

There has been an increase in these types of lawsuits, and it will continue, David Yeremian, founder and principal of David Yeremian & Associates Inc. in Los Angeles, told Bloomberg Law in an email. Yeremian represented the workers in the Starbucks case, but he declined to speak about the private settlement.

“Nearly everyone has a cellphone making it easy to reach an employee with a call, text or email during a break or after working hours,” he said. “Employees can feel pressured to respond to calls, texts or emails after hours when they are not clocked in, or they may even be required to respond depending on the employer’s policies and expectations.”

Defining Compensable Time

Courts also analyze compensable time by examining whether employees are “waiting to be engaged” or are “engaged to wait,” Shannon Liss-Riordan, a partner at labor, employment, and class action firm Lichten & Liss-Riordan PC in Boston, told Bloomberg Law. “If you’re waiting to be engaged you aren’t working, but if you’re engaged to wait you are being paid to be at the ready.”

For some employers, first- and second-line managers could be to blame for requiring or allowing off-hours contact with employees without knowing where the line on compensable time is drawn, Williams said.

“We have seen every version of a case where an employee claims they worked and have not been properly compensated,” Williams said of the Southern District of Florida courts. “I don’t think employers are deliberately trying to not pay folks, or deliberately trying to violate the statute. But the statute is so paternalistic and so hard to comply with from a technological perspective” that it’s paramount that supervisors understand what compensable time is for overtime-eligible employees.

Employers should track off-hours work to protect themselves from litigation, but if the work can be quantified and tracked, then it probably doesn’t qualify as “de minimis” and should be compensated, Williams said.

State law can also play a role, as each state has its own rules and nuances to how courts rule, Liss-Riordan said. For example, California generally has more laws that cover wage and hour issues, especially when it comes to enforcement. “That’s why you’re more likely to see litigation in a place like California where there is more teeth to the laws,” she said.

Local Law Fix?

One councilman from New York City believes that the 24/7 connection to work has gotten so pervasive that it needs a legislative fix.

“As someone who’s part of the millennial generation in the workforce, I’ve always thought about how technology has seeped into our personal lives and into our jobs,” New York City Councilman Rafael L. Espinal Jr. (D), told Bloomberg Law. “When are we really off the clock? The amount of pressure and anxiety that creates for workers is worth considering.”

Inspired by a law in France that gives employees the right to disconnect, Espinal has introduced legislation to do the same. If passed, it would be the first of its kind in the U.S.

Employers aren’t yet embracing the proposal, but one positive side effect could be reduced litigation for these kinds of wage and hour cases, he said.

“I think it’s important to note that this bill doesn’t make it illegal for employers to reach out to an employee, it just gives them a right to take control of their personal lives and decide if they are available for that correspondence,” Espinal said.

Mayor Bill de Blasio’s (D) office isn’t on board with the proposal, but Espinal believes it’s an important step to address worker burnout. “I’ve heard from a lot of New Yorkers and folks across the country who say this is a good idea,” he said. “I think this is a conversation now more than ever that needs to be had, specifically how this is going to go moving forward.”

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bloomberglaw.com

To contact the editors responsible for this story: Simon Nadel at snadel@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com