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Jared Hamilton
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H Gregory Gershman

H Gregory Gershman Managing Partner

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New Federal Law decision that impacts paying your employees

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The Federal Courts recently made an important decision concerning employee pay, while engaged in screening, or outside required activities.

Here is the case:

A warehouse required it's workers to undergo a security screening at the end of each day.  They would have to punch out and submit to screening, that would take approximately 25 minutes to go through the process.  The employees submitted a complaint to the Labor Department, stating that since the activity was strictly to the benefit to the employer that it must be compensated.

This is covered by the FLSA (Fair Labor Standards Act), which states that any activity that is an "intergral & indespensable" part of performing the principal work an employee is required to perform must be compensated.  The Court decided that screening does not fall under this, since it is not an actual part of performing ones job.

So, what is the upshot for a dealership?  First, this means that when a dealership asks an employee to go for drug test, as an example, even if it is outside of their scheduled hours this does not have to be paid.  On the other side, training would be required to be compensated, whether or not it was during normally scheduled hours.  Training is indespensable part of performing the job, so any training much be paid.

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