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Paying Employees For Their Time

Amazon.com warehouse floor
photo by Scott Lewis

Not many laws governing the workplace can function well for nearly 70 years, at least without significant amendment; the world simply changes too much and too fast. But courts must interpret the laws we have, and if changes need to be made, it is up to Congress to make them.

For a recent example, consider the Supreme Court’s decision in the case of Integrity Staffing Solutions, Inc. v. Busk. Integrity Staffing, a temp agency that provides workers to a pair of Amazon fulfillment warehouses in Nevada, requires workers to wait on site for a security screening when leaving work, as a measure to prevent shoplifting. Workers are not paid for the time they spend waiting to be screened. The workers who brought the class-action lawsuit contended that they must wait up to 25 minutes daily for these screenings. Their lawyers argued that because screenings are a mandatory condition of the job, imposed by the employer, workers are entitled to be paid for the time they devote to the process.

The high court did not agree. In a unanimous decision, the Court declared that screenings are not an “integral” part of the job, and therefore Integrity is not obligated to pay workers to undergo them. In other words, because warehouse workers are not hired to undergo screenings, the screenings are merely incidental to the work. It does not matter whether employers mandate such screenings or not.

The Court’s decision rested largely on its view of the 1947 Portal-to-Portal Act. The law specifies that companies need not pay their workers for “preliminary” or “postliminary” activities, which take place before or after the workday proper. For instance, employers don’t need to pay their employees for their commute time. Prior interpretations of Portal-to-Portal, especially the Court’s 1956 decision in Steiner v. Mitchell, gave rise to the test that considers whether a task is integral to a job’s function.

The Obama administration sided with Integrity in the dispute, which means that every branch of government has now concluded that Integrity’s actions fall within the scope of the law that Congress passed shortly after World War II ended. Our economy and workforce, needless to say, is quite different today than it was then, which is why the matter probably should not rest here.

It seems patently unreasonable for employers to demand their employees submit to time-consuming pre-and post-work security procedures and not pay them for it. Such screenings are for the employer's protection, not the workers’, making it a shaky parallel to workers donning protective gear in a chemical plant, for instance. Integrity, and other employers who require security checks, do not allow workers to opt out of them, and have no particular incentive to make such checks quick or efficient. In fact, they have the opposite incentive, if slow processes are cheaper.

Demanding that workers submit without compensation may be legal, but in many situations it is probably not fair. I would not conduct business that way. Yet under our current framework, employees have little recourse.

Congress can remedy the situation by amending the Portal-to-Portal Act. It would be a good opportunity for Congress to take a good, long look at the law as a whole. Lawmakers can then address modern labor questions, such as how to compensate time employees spend at home checking their emails.

We live in a different world today than we did in 1947. This decision proves that it is past time the law caught up.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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