TRANSFORMING Teams By Paige McAllister
Compensable time A
When do you need to pay a non-exempt employee?
recent story reported that Delta Airlines will begin paying flight attendants half-time for boarding duties, a change from the industry-standard of only paying once the doors close. Delta is implementing this change to stave off a push to unionize its flight attendants. However, it raised a critical question for many people—are there times we do not need to pay employees when they work? This, like many aspects of wage-and-hour law, has a complicated answer as there are many factors to consider. First, let’s define some key terms: • Fair Labor Standards Act (FLSA) is the federal law that defines “wage-and-hour” law and applies to most companies. While certain enterprises are not subject to some FLSA requirements, even they must follow minimum wage, overtime, record-keeping, and child labor requirements. • Non-exempt employees are covered by FLSA and must be paid a minimum wage of at least $7.25 per hour for all hours worked and overtime of time-and-a-half their regular hourly rate for all hours worked over 40 hours in a workweek (a set seven-day/168-hour period). Employers must track and retain records of their extra time worked using any timekeeping method, such as timeclock, timecards, computer systems, etc. • Exempt employees meet specific criteria as defined by the FLSA releasing employers from these minimum wage, overtime, and time-tracking requirements. These employees usually work for a salary (“wage guarantee”) regardless of how many hours they work in a workweek. • Some states have laws dictating a higher minimum wage, more generous overtime payments, and/or different exemption standards so employers must follow the one that most benefits the employee.
Exemptions are based on the actual job duties each employee performs, not on their title or position. FLSA establishes many exemptions, the most common of which are executive, administrative, professional, computer and outside sales employees. However, there are numerous others defined under FLSA, such as exemptions for highlycompensated employees, first responders, healthcare work-
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n Building Products Digest n June 2022
ers, and domestic workers. For example, Delta is exempt from certain requirements under the Railway Labor Act so they are not obligated to pay this boarding time. Some FLSA exemptions cover specific requirements, such as the Tip Credit, which allows employers to reduce the minimum wage paid (currently down to $2.13 per hour, although some states have different requirements) for employees who qualify as tipped employees, but retains the overtime and record-keeping requirements. Commissioned retail employees who earn over half of their wages from commissions and whose regular pay rate is at least time-anda-half minimum wage may be exempt from minimum wage and overtime requirements; time-tracking is still required. Compensable time is all time for which a non-exempt employee must be paid. This includes all time an employer allows a non-exempt employee “to suffer or permit to work,” meaning any work done on behalf of or to benefit the company regardless if it is requested, scheduled or approved. Most compensable time is easy to determine—the time a non-exempt employee is actively performing their job duties. However, there are several areas of compensable time which may not be obvious but must still be paid. Some of these categories include (for ease, in this section “employee” will refer to non-exempt employees only): • “Portal-to-Portal Act”: A part of FLSA dictates employees must be paid for activities that are “integral and indispensable” to their main job duties, are not de minimis (less than 10 minutes), and do not fall under certain criteria. Travel time and donning & doffing are covered in this act. • Travel time: An employee must be paid for some, but not all, of their time spent traveling as part of their job duties. While they do not need to be paid for any time traveling to and from their home and work, they must be paid for all time traveling between different work sites during the day. For example, an employee who reports to the main office and then goes to work at another worksite during the day would not need to be paid to drive from home to the main office but would need to be paid for the time traveling from the office to the worksite(s) during the day and back to Building-Products.com
