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Guidance on Compensation for After-Hours Work on Mobile Devices

9/1/17

By: Margot M. Parker
Of the many modern day conveniences brought to us by the rise of technology and widespread use of smartphones, one may be a double-edged sword.  That is, you’re never off work.  Or at least, so it seems.  This is especially true for employees who are given smartphones by their employers as a means for communicating on work-related matters.  And significantly, it raises questions regarding an employer’s duty to compensate non-exempt employees for after-hours work conducted on such devices.
The issue arises under the Fair Labor Standards Act (FLSA), which requires employers to pay employees for all hours they are “suffered or permitted” to work, with overtime compensation for hours exceeding 40 per week.  The FLSA, however, does not require an employer to pay for work it did not know about or have reason to know about it, including after-hours work on a mobile device.
Recently, in the case of Jeffrey Allen, et al. v. City of Chicago, the Seventh Circuit upheld a U.S. District Court’s decision denying claims brought by a class of police officers against the Chicago Police Department (CPD) based on its failure to compensate the officers for off-duty time spent using BlackBerry devices for work-related communications.  While the Court recognized that off-duty work on mobile devices is compensable work, it found the officers knowingly failed to report such time, despite the CPD’s reasonable reporting procedures.  The Court held in favor of the CPD based on its findings that: (1) the CPD it did not know or have reason to know of the officers’ hours, and (2) its time reporting procedure was well known and would have allowed the officers to be compensated, had it been used.
In reaching its decision, the Seventh Circuit considered similar holdings by the Sixth and Ninth Circuits, both of which recognize the importance of maintaining reasonable time reporting procedures and an employee’s duty to follow the same:

  • “When the employee fails to follow reasonable time reporting procedures she prevents the employer from knowing its obligation to compensate the employee.”  White v. Baptist Memorial Health Care Corp., 699 F.3d 869, 876 (6th Cir. 2012).
  • “Where an employer has no knowledge that an employee is engaging in overtime work and . . . deliberately prevents the employer from acquiring knowledge, the employer’s failure to pay is not a violation of [FLSA § 207].”  Forrester v. Roth’s I.G.A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir. 1981).

To avoid suits like Allen, the Seventh Circuit’s decision suggests employers should implement a policy for compensating employees for work conducted on mobile devices and clearly articulate it to employees to avoid the perception that reporting such time is discouraged.  Or if such overtime work is unpermitted, employers should avoid issuing smartphones to non-exempt employees or clearly state that such devices should not be used after work hours.
Finally, it is important to remember that, notwithstanding an employee’s duty to report all time, employers should make reasonable, good-faith efforts to track all time worked by non-exempt employees and compensate accordingly, as an employer may be found liable for failing to pay an employee for unreported overtime the employer should have known about, including after-hours work on smartphone devices.
For more information, please contact Margot Parker at mparker@fmglaw.com.