October 2008

USE OF A PDA MAY LEAD TO OVERTIME

BlackBerrys and similar personal digital assistant devices ("PDAs") have infiltrated the workplace, allowing employees to be in constant communication with the office, customers and clients, and blurring the line between work hours and after-work hours. In many circumstances, PDAs are distributed by employers to employees with an express or implied goal of having them stay connected outside of normal business hours. Other times, employees will use their own devices to stay connected - perhaps even without specifically telling their employers. In any event, employees are increasingly checking and responding to work-related e-mails outside of normal working hours, be it while outside the office at lunch, at night, on weekends or on vacation.

Recently there has been discussion about whether time spent on PDAs may require employers to pay overtime compensation under the Fair Labor Standards Act ("FLSA") and applicable state laws. Legal commentators suggest that a new wave of wage-and-hour litigation is just around the corner. It therefore behooves employers to understand the issues involved and establish appropriate policies and procedures.

The FLSA requires that covered, "non-exempt" employees be paid at least the minimum wage for all hours worked, and not less than time and one-half of the employee's regular rate of pay for time worked over 40 hours in a single workweek. The general rule is that non-exempt employees must be paid for all hours "worked." Whether time is actually "hours worked" is determined by asking whether the employee is "suffered or permitted to work". Thus, if the employer knows or has reason to believe that the work is being performed, the time must be counted as hours worked. Hours worked includes work on the employer's premises, at a designated work place, at home or at some other location.

Courts interpreting the FLSA have stated that "insubstantial or insignificant periods of time" are considered "de minimis" (minimal), and need not be counted when calculating an employee's working time.Such is not the case when an employee is required to give up a substantial measure of his or her time and effort. Factors that would be considered in determining whether an employee should be paid for work done include: (1) the practical administrative difficulty of recording the additional time; (2) the size of the claim in the aggregate; and (3) whether the employee performed the work on a regular basis. The regulations interpreting the FLSA, however, state that working as little as 10 minutes per day should not be considered de minimis under the law.

Thus, a non-exempt employee who, as a result of using a PDA to read and send work-related e-mails after normal work hours, works more than 40 hours per week, may seek to be paid overtime for that time.

Under the FLSA, only "non-exempt" employees are eligible to receive overtime pay. The law includes a number of exemptions from its minimum wage and overtime requirements, including for workers employed in a bona fide administrative, executive or professional capacity or as an outside salesperson. It also provides an exemption for certain computer employees. Each of the following criteria must be satisfied for a position to be "exempt" from overtime pay under the FLSA t:

• The position must be paid on a salary (not hourly) basis, except for certain computer workers.
• The position must be paid at least $455 per week.
• The position's job duties must meet the duties test for one or more of the exemption categories set forth in the FLSA overtime regulations. Job titles do not determine exempt status.

Employees who do not fit into any of the exemptions are deemed "non-exempt" and therefore must be paid for "all hours worked." Proper classification is important - a "non-exempt" employee who is not compensated for "all hours worked" can claim up to two, and in some cases three, years of back overtime or wages.

While we are currently not aware of any legal decisions regarding payment of overtime for use of PDAs, employers should nonetheless create and enforce written policies regarding the use by non-exempt personnel of such devices outside of normal work hours. Such policies may include:

• prohibiting work-related use of PDAs
• limiting the amount of time that can be spent using these devices outside of normal work hours
• requiring that devices only be used outside of work hours when specifically directed to so
• requiring express consent before using these devices outside of normal work hours
• requiring employees to report all work time outside of normal working hours