Tenth Circuit Finds De Minimis Time Is Compensable

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Tenth Circuit Finds De Minimis Time Is Compensable

In a recent case before the U.S. Court of Appeals for the Tenth Circuit, the court has held that the de minimis doctrine may not prevent an employer from being held accountable for even minutes of time spent working. The court found that the employer had failed to prove the practical difficulty of tracking the amount of time in question and that the time occurred with regularity. 

In this case, a group of call center representatives (CCR) working for a financial services company filed an action under the Fair Labor Standards Act alleging that their employer had failed to pay them for the time it took to start their work computers and log into certain software. These CCRs needed to insert a badge into their computers and enter certain credentials to begin work as well as to clock in and start receiving payment for their work.

The average time this activity took between the three call center locations the company maintained was about two minutes. A district court maintained that the activities performed were compensable; however, that they were also de minimis and thus granted the employer summary judgment and costs. The plaintiffs appealed this decision disputing whether the amount was actually de minimis.

A panel of the Tenth Circuit Court agreed with the plaintiffs and reversed the judgment and the award of costs. Both parties in the case agreed that the CCR’s principal duty is to service student loans which are performed through phone and email interaction with debtors. However, according to the court, the remaining dispute was as to whether or not the pre-shift duties the plaintiffs engaged in were both indispensable and integral to their principal duties resulting in compensability under the FLSA.

The employer argued that the duties required little exertion and thus should not be regarded as work; however, the Tenth Circuit did not agree with the idea that exertion is the defining feature of work. Further, the court found that the necessity of using the computers to perform their jobs made the activity indispensable to the plaintiff’s primary duties and thus compensable. 

To determine whether the activity was de minimis, the Tenth Circuit applied the three-factor balancing test and found that the factors again favored compensation. For the first factor, the employer had failed to demonstrate a practical administrative difficulty in recording the additional time. The employer had already done so for this very cause, and it did not vary significantly between employees. The second factor of aggregate quantity of compensable time was $125 annually for every employee and weighed in neither party’s favor. However, the court found that the third factor, the regularity of the activity, weighed in the employee’s favor.

Thus the court found that the three factors weighed in the plaintiff’s favor and, as a result, reversed the ruling and remanded the case for further proceedings. 

Employer Takeaways

This case should serve as a reminder to employers that even a few minutes of time spent before beginning work may prove compensable. It is important that any regular pre-shift activities be considered under the FMLA and potentially compensated.