Ninth Circuit Rules on FLSA Compensable Time

On October 24, the Court of Appeals for the Ninth Circuit (Ninth Circuit) issued a decision on FLSA compensable time. In brief, the Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards. Markedly, the FLSA requires that employers pay covered nonexempt workers a minimum wage of not less than $7.25 per hour. Any covered individuals who work over 40 hours in a workweek must be paid overtime pay. Specifically, employers must calculate overtime pay at a rate of one and one-half times the regular pay rate. In this case, the Ninth Circuit ruled on FLSA compensable time related to “booting up” computers in a call center. Earlier, the Department of Labor (DOL) published a proposed rule for determining employee versus independent contractor classification.

Background on the Case

According to JD Supra, the Ninth Circuit’s ruling overturned a previous court decision. In Cadena v. Customer Conexx LLC, No. 21-16522 (9th Cir. 2022), the court reversed a Nevada district court’s summary judgment. The previous court ruled that the time spent booting the computers up was not compensable. Specifically, this was because Connexx did not hire workers to turn on computers or clock into a computer-based timekeeping system. Because of these facts, the district court believed it was not FLSA compensable time.

The Ninth Circuit’s Ruling

Explicitly, the Ninth Circuit disagreed with the court’s focus on whether such activities were “integral and indispensable” to their duties. Subsequently, the Ninth Circuit found that the analysis should have focused on “the importance of booting up the computer to the employees’ primary duties of answering calls and scheduling rather than to their need to clock in using an electronic timekeeping system.” Above all, the workers could not perform their jobs without functioning computers. For example, the computers contained the phone program, customer information, scripts, and email programs used to perform their duties. For that reason, booting them up is integral to the principal activities performed by the employees and may be compensable.

Previous Similar Decisions

The Ninth Circuit’s ruling follows a similar decision by the Court of Appeals for the Tenth Circuit (Tenth Circuit). Likewise, the Tenth Circuit’s case involved a customer call center. In Peterson v. Nelnet Diversified Solutions, 20-1217 (10th Cir. 2020), the court reversed an earlier Colorado district court decision. Particularly, the Tenth Circuit held that the time call center workers spent booting up their computers was integral to their jobs. This was in contrast to the district court’s finding that the time was de minimis.

Employer Takeaways

In conclusion, it is essential to note that the Ninth and Tenth Circuits’ decisions are only binding in those jurisdictions. The Ninth Circuit covers the following areas: Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington. Comparatively, the Tenth Circuit covers Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming. However, as more similar cases pop up across the country, employers everywhere should consider whether their workers require a functioning computer to perform their duties. If so, workplaces may need to adjust current policies to account for all necessary FLSA compensable time. Additionally, employers who allow workers to perform remote work may also not be properly following compensable time laws. Wage and hour violations can easily occur if not properly tracked. It is the duty of every employers to make sure that all workers are being properly paid for their time worked.