The Fair Labor Standards Act (FLSA) requires employers to pay nonexempt workers a minimum wage per hour plus time and a half for hours worked over 40 per workweek. This seems straightforward, but it hasn’t always been.

In Walsh v. East Penn Manufacturing Co., Inc., a manufacturer learned this lesson the hard way. A jury ordered it to pay more than $22 million in back wages for more than 7,500 employees. The U.S. Department of Labor (DOL) alleged, and the U.S. District Court for the Eastern District of Pennsylvania agreed, that the manufacturer failed to fully compensate its employees for time spent changing into and out of uniforms and personal protective equipment (PPE) and showering at the ends of their shifts.

What does the FLSA require?

The FLSA requires employers to pay covered, nonexempt workers a minimum hourly wage. Currently, the federal minimum wage is $7.25 per hour, but many states and localities impose higher minimums. After nonexempt employees work 40 hours in a workweek, they are entitled to overtime pay. Employees exempt from these requirements include executive, administrative and professional employees; outside salespeople; and people in certain computer-related jobs.

According to a guide provided to the manufacturer by the DOL, “hours worked” included “all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal activity of the workday to the end of the last principal work activity of the workday.” Courts have held that activities before or after the workday are compensable under the FLSA if they are an “integral and indispensable part” of an employee’s principal activities. This includes donning and doffing PPE and post-work showering by workers who regularly handle hazardous materials.

What happened in the case?

In Walsh, because hazardous chemicals and other materials were used in the manufacturing process, the company required all employees to wear PPE, regardless of their risk of exposure. Most employees were required to change out of their street clothes and into uniforms before entering the production floor. And, depending on the hazards associated with their jobs, some were also required to wear additional PPE, including safety shoes, respirators and hard hats.

At the end of their shifts, uniformed employees removed their uniforms and changed back into their street clothes. Some were required to shower as part of their end-of-shift activities, depending on the materials they were exposed to. The company scheduled workers in eight-hour shifts, providing a five-minute grace period at the beginning of a shift to change clothes and a 10-minute grace period at the end of a shift to change clothes and shower.

In court, the parties agreed that changing clothing and showering were integral and indispensable activities, but they disagreed about how the time spent on those activities should be measured. The DOL asserted that it should be based on the actual time it took for employees to change clothes and shower. The company, on the other hand, argued that it was sufficient to compensate employees based on a reasonable time for completing those tasks, and claimed that its 5- and 10-minute grace periods were reasonable.

The court, finding no legal precedent for the company’s reasonable time approach, held that compensation should be based on the actual time spent on pre- and post-shift activities. Because the company failed to do so, it violated the FLSA. In addition, because the company did not track the actual time employees spent on these activities, it also violated the FLSA’s recordkeeping requirements.

Key takeaways

Does your business have workers who engage in pre- or post-shift activities that are integral and indispensable to their principal work activities? If so, you will need to ensure FLSA compliance to avoid unexpected overtime liability.

You can do this by tracking the time spent on those activities, ideally by having employees clock in before performing pre-shift activities and clock out after performing post-shift activities. To avoid paying overtime, consider reducing the time employees spend on principal work activities so that pre- and post-shift activities can be completed in an eight-hour workday.

For more information, contact Brandon Vahl at [email protected] or 312.670.7444. Visit ORBA.com to learn more about our Manufacturing and Distribution Group.