Source: https://gross-gross.com/legal-issues/compensible-time-under-flsa/
Timestamp: 2019-04-19 20:12:53+00:00

Document:
Under the Fair Labor Standards Act (FLSA), employers generally are required to pay an employee overtime for each hour worked in excess of 40 during a single workweek at a rate of one and one-half times his regular hourly rate1. However, the hours an employee spends at the office or other worksite are not the only consideration. There is “on-duty,” “off-duty” and “on-call” time. And there is “travel” time.
The same principles also apply to “on-call” scenarios. Typically, unless an employee is required to remain on-call on the employer’s premises or within a fixed geographic location, the on-call hours are not compensable for purposes of the FLSA.11 Therefore, a doctor who must remain within a one-mile radius of the hospital that employs him is considered to be working while on-call; the restriction on the doctor’s movements is a significant impingement on his freedom to use and enjoy his time. By contrast, an employee who is not required to remain on the employer’s premises or at a fixed location, but only required to be available should his services be needed, is not working while on-call. Accordingly, a tow-truck operator who is authorized to travel freely within a community and merely required to carry a cellular phone during periods in which he is away from the office is considered to be not working while on-call; carrying a cell phone is a minimal restriction on his freedom.
The primary activity deemed not compensable is the employee’s act of commuting to and from work at the start and end of each workday.15 An employee’s regular and daily commute is “ordinary home-to-work travel, and is not compensable work time. This is true, whether the employee works at a fixed location or at different job sites.16 However, when an employee is required to report to a meeting place to receive instructions or to pick up tools and equipment, the travel from the designated meeting place to the job site is part of the day’s work and must be counted as hours worked.17 Consequently, in the case of a field inspector who reports to a central office every morning to receive his assignments for the workday and returns every evening to report his findings, all travel time logged from the point at which the field inspector leaves the central office in the morning until he returns to that office at night is considered compensable.
Likewise, an employee must be compensated for time spent traveling from the place of performance of one principal employment activity to the place of performance of another principal employment activity.18 The best example is a repairman who travels from home to job site, and then from job site to job site. All travel time logged from the when he arrives at the first job site to when he leaves the last job site is compensable.
If travel that keeps an employee away from home overnight, travel time is work time when it cuts across the employee’s typical workday.21 The employee is deemed to be simply substituting travel for other duties.22 Travel time in such situations is not only hours worked on regular working days during normal working hours, but also during corresponding hours on typical non-working days (usually Saturdays and Sundays).23 Therefore, when a business consultant with a regular 9-to-5, Monday through Friday work schedule travels out of town between 1 and 3 p.m. on a Saturday, those hours are compensable.
It is important to recognize that an established company custom, practice, or policy that is more generous than the Portal Act in its definition of compensable travel time can create liability where it might not otherwise exist under the law. This is also the case where there is a contractual (oral or written) arrangement between an employer and an employee that expressly identifies an activity as compensable.29 Therefore, when terms of an employment contract identify a specific type of travel time as compensable or, as a result of a custom, practice, or policy, employees are regularly paid for travel time that otherwise would not be compensable, the exemptions provided by the Portal Act are negated. Under these circumstances, if an employer desires to follow only the Portal Act, the employer should first notify the affected individuals of intended changes in custom, practice, and/or renegotiate any contractual arrangements.
Whether an employee is subject DOT jurisdiction is a two-part inquiry. First, do the employee’s activities affect the safety of operation of a motor vehicle?32 The answer is yes when an employee, as part of his regular duties, drives a motor vehicle on public highways. Second, is the employer a “motor private carrier?” While this requirement would seem to exclude most businesses other than freight companies, it does not. A “motor private carrier” is defined as (1) a person who transports property, (2) that the person must own or lease, (3) by motor vehicle in interstate commerce.33 Additionally, transportation of the property must be for sale, lease, rent, or bailment purposes, or to further a commercial enterprise.34 Given this broad definition, the courts and the Department of Labor often have found that employers in industries other than the transportation industry fall within the “motor private carrier” definition.35 An example of an unlikely “motor private carrier” is a computer service company that employs field engineers to service their customers’ computers at off-site locations. Because the field engineers travel to customer sites while transporting the employer’s tools and equipment, the employer satisfies the definition of “motor private carrier”36 As such, the engineers are exempt from the overtime compensation requirements of the FLSA for all hours worked.
However, it must be pointed out that use of the MCA exemption to mitigate overtime exposure for non-transportation-related businesses is a rather aggressive approach to curbing costs with possibly significant employment relations and legal implications. As such, a complete review of the facts and circumstances of each case is strongly recommended prior to implementing such a practice. It also is suggested that an opinion letter be requested from the Department of Labor.
This caveat is even more well-taken following passage of the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA).37 Prior to SAFETEA, the size and weight of the motor vehicle and material transported were not factors in whether an employer qualified as a “motor private carrier.” As such, the MCA exemption potentially applied to a broad range of employees who transported property by motor vehicle. But SAFETEA changed the definition of “motor private carrier” significantly, limiting its application. This change was accomplished by inserting one word — “commercial” – in the definition of “motor private carrier,” making it: (1) a person transporting property, (2) that the person must own or lease, for sale, lease, rent, bailment or to further a commercial enterprise in interstate commerce (3) by commercial motor vehicle.38 A “commercial motor vehicle” is defined as “a self propelled or towed vehicle used on the highways in interstate commerce to transport passengers or property, if the vehicle (A) has a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater; (B) is designed or used to transport more than 8 passengers (including the driver) for compensation; (C) is designed or used to transport more than 15 passengers, including the driver, and is not used to transport passengers for compensation; or (D) is used in transporting material found by the Secretary of Transportation to be hazardous.”39 Gross vehicle weight rating (GVWR) is the maximum loaded weight of a vehicle (the combined weight of the vehicle, fuel, passengers, luggage, tools, equipment, trailer hitch, and any and all other payload). Vehicles with a GVWR greater than 10,000 pounds include medium, heavy and extra-heavy trucks, such as heavy-duty pick-up trucks, delivery vans and dump trucks.
Thanks to SAFETEA, many employees who previously qualified for the MCA exemption by virtue of the property they transported now are subject to FLSA overtime requirements, because the vehicles they use to transport that property are not big enough. As such, the employees must be paid one and one-half (1 ½) times their regular rate for hours worked in excess of 40 in a week, including travel time compensable under the Portal Act. It appears that limiting the application of the MCA exemption was an unintended result of SAFETEA. As such, it is possible that Congress will return the exemption to its former breadth. Until then, employers must reclassify employees who no longer qualify for the exemption and pay overtime under the FLSA.
This information is intended for informational purposes only. Each situation must be considered and evaluated separately, possibly with involvement of legal counsel.
2 29 C.F.R. § 778.223 (2006).
4 29 C.F.R. 785.15 (2006).
6 29 C.F.R. 785.16 (2006).
11 29 C.F.R. 785.17 (2006).
13 29 U.S.C. § 254(a)(1) (2006).
17 29 C.F.R. 785.38 (2006).
18 29 C.F.R. § 790.7 (2005).
20 29 C.F.R. 785.36 (2006).
21 29 C.F.R. § 785.39 (2006).
23 29 C.F.R. § 790.7 (2005).
26 29 C.F.R. § 785.39 (2005).
27 29 C.F.R. 785.16 (2006).
29 29 U.S.C. § 254(b)(1).
30 Levinson v. Spector Motor Service, 330 U.S. 649 (1947).
31 29 U.S.C. § 213(b)(1) (2006).
31 Masson v. Ecolab, No. 04-4488, 2005 U.S. Dist. LEXIS 18022 (S.D.N.Y. Aug. 17, 2005).
32 49 U.S.C. §13102(13) (2006).
34 FLSA 2005-27, Op. Dep’t of Labor (Aug. 26, 2005).
35 Friedrich v. U.S. Computer Services, 974 F.2d 409 (3rd Cir. 1992).
37 Safe, Accountable, Flexible, and Efficient Transportation Act: A Legacy for Users (2005).
38 49 U.S.C. §13102(13) (2006).

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