The Fair Labor Standards Act is a federal statute establishing minimum wage, overtime pay, child labor and equal pay requirements. The Act requires that employers pay employees for all hours worked during a work week. Overtime compensation must be paid for hours worked in excess of the maximum applicable number of hours for employees who are not exempt from the Act’s overtime pay requirements. Many questions have been raised regarding the determination of what hours constitute “hours worked” within the meaning of the Act.

The United States Court of Appeals for the Sixth Circuit has recently issued a decision regarding compensation due employees who must wait to receive assignments at the beginning of their day. Specifically, employees of Akron Insulation and Supply Inc. had an official starting time of 7:30 a.m., but were required to report to the workplace earlier in order to load their trucks and receive their assignments. These employees did not always have work to do immediately, and often waited for their assignments or waited for other crew members to arrive. The company did not pay its employees for this “waiting time” and the company was charged with violating the Fair Labor Standards Act which requires compensation for all hours worked.

The Court was not persuaded by the employer’s argument that the employees were voluntarily clocking in early to socialize and have coffee. Rather, the Court focused on the fact that the employees were required to report prior to 7:30 a.m. to the benefit of the employer. Hence the employer was required to compensate its employees for this time, and the company was held liable for $95,000.00 in back pay. For questions about this case or to discuss other wage and hour issues, please contact Deborah P. Ecker.