Booting Up Is Not Work: Federal Court Clarifies Pay Rules for Remote Employees

Quick Hits

• In Lott v. Recker Consulting LLC, a “boot-up time” case, the U.S. District Court for the Southern District of Ohio ruled that compensable time begins for remote call center workers when they start operating programs that are integral to their work. Likewise, compensable time ends when the worker closes the last program.
• The court found that turning on a computer, typing in usernames and passwords, and opening applications are preliminary activities and not compensable time. Likewise, it found shutting down the computer, locking the screen, or putting it in sleep mode are postliminary activities and not compensable time.
• The time needed to access or start up applications and programs integral to performing one’s job duties is considered compensable.

Background on the Case

In August 2023, workers for a patient call center brought a class action against Recker Consulting LLC, an IT firm, and LYP Call Center, claiming they were not paid for compensable time under the federal Fair Labor Standards Act (FLSA). Recker Consulting was the employer for these employees until November 2022, when a corporate rebranding took place and LYP became their employer.

The 130 workers who joined the FLSA claim by filing opt-in consent forms were hourly, nonexempt employees who were expected to work forty hours per week for a call center that served healthcare providers. They alleged Recker Consulting and LYP violated the FLSA and related Ohio laws by failing to pay them for time they spent booting up their computers and logging in at the start of the day, booting up their computers and logging in after their meal break, and shutting down the computer at the end of the day. They also alleged that the employers’ time-rounding policies were impermissible under the FLSA. They also sought overtime pay for the time worked beyond forty hours per week.

Working remotely at home, these employees fielded requests and questions from patients, using a laptop, multiple monitors, keyboard, mouse, docking station, phone system, electronic medical record systems, and other software. For example, the named plaintiff said she would start the workday by turning on her computer, entering a username and password, dual authenticating through a security platform, and opening her timekeeping program, a corporate collaboration platform, a telephone directory database, the app-based phone system, and mapping software. Employees clocked in by starting their timekeeping program on a website or a smartphone app. The entire process often took five to ten minutes.

Furthermore, the plaintiffs claimed the companies required them to complete tasks that took up part of their unpaid meal breaks, which were thirty minutes for each eight-hour shift. The employees said they would change their status in the phone system to unavailable and clock out of the timekeeping system at the start of their meal break, and it would take several minutes to restart all of their programs when the meal break was over. This time was not compensated.

Then, at the end of the workday, it would take about five minutes to notify a supervisor they were leaving for the day on the collaboration platform, exit out of the phone system, clock out on the timekeeping program, close other programs and applications, and shut down the computer. Similarly, that time was not compensated.

Recker Consulting and LYP argued that the time spent on pre-shift and post-shift activities was not compensable because it was preliminary and postliminary. Assuming the time was compensable, Recker Consulting and LYP also argued it was de minimis, and therefore it could be disregarded.

In the employee handbook of 2022-23, the employees were instructed to clock in no sooner than five minutes before their shift and clock out no later than seven minutes after their shift. They were told they were not allowed to work overtime without permission, and violating that rule could result in disciplinary action or termination. The 2022-23 handbook clarified that the workers were allowed a “5-minute grace period” to allow for computer and phone systems to boot up, but “this should only be used occasionally.” The workers needed to be signed into the phone system and “have loaded ‘all job-related software’ by their scheduled shift time to avoid a tardy designation.” Those who accumulated enough points for tardiness under the handbook’s point system could be subject to disciplinary action.

Recker Consulting and LYP maintained a policy to round clock-in and clock-out times either up or down to the nearest quarter-hour increment. The timekeeping system only recognized quarter-hour increments. The employees alleged the timekeeping system violated federal regulations by consistently benefiting the employer. Recker Consulting and LYP argued that the time-rounding policy was legally permissible because “it was neutral as written and in application.”

The Court’s Analysis

To determine when the workday starts and ends for remote workers doing computer tasks, the court noted that “work” under federal law means “all activities which are an integral and indispensable part of the [employee’s] principal activities.” This includes physical or mental exertion “controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” The court emphasized that the FLSA focuses on whether an activity, not a tool, is integral to the work.

In this case, the court said it remained “unconvinced that the simple act of waking up or pressing the power button of a computer makes that act an “integral’ part of ‘the productive work that the employee is employed to perform.’” It reasoned that turning on a computer could lead to activities that are unrelated to work, like reading a news article.

However, the court concluded that the time employees spent accessing the phone system, directory database, or a client’s electronic medical record system was compensable.

The court granted Recker Consulting and LYP’s motion for summary judgment in part. It concluded that it would be premature to apply the de minimis doctrine, which applies to time that is so minuscule that it is too difficult to record for payroll purposes.

While the time-rounding policy was neutral on paper, the court stated, it was likely to favor the employers when combined with the employers’ clock-in, clock-out, and tardiness policies. Thus, the court allowed the claims regarding time rounding to proceed. Time-rounding policies are permissible if they do not result in a failure to pay workers for all the hours they worked over a period of time.

It is noteworthy that this court’s decision conflicts with similar boot-up cases in other courts in which those courts have found that compensable time begins when the computer is turned on in physical call centers. The U.S. District Court for the Southern District of Ohio believes this case is the first published decision to address boot-up and shut-down time in a remote-work setting.

Next Steps

This case sheds light on when employers must pay their nonexempt remote call center workers for time spent on activities before a shift, after a shift, or during a meal break. The court allowed certain claims to proceed in this case, as they related to uncompensated time spent on principal activities, including those that are integral and indispensable for work, but it dismissed claims for time spent simply engaging with the computer.

Employers may wish to review their timekeeping and time-rounding policies to ensure they comply with state laws and the FLSA.

Although the focus of the case was boot-up time, the case delivered several additional legal nuggets of great interest to practitioners in this area. First, the court shed some light on the practical applications of the Sixth Circuit Court of Appeals’ Clark standard, which upended the traditional two-certification process for class actions under the FLSA. Because dispositive motions were filed before class certification, the court held that its partial dismissal order will “not have res judicata effect as to those currently-only-conditional parties.” That means this court order does not prevent parties from relitigating the same claims in the future.

Second, in a footnote, the court clarified that the Ohio state claims “rise and fall” with the FLSA claims.

Ogletree Deakins will continue to monitor developments and will provide updates on the Employment Law and Wage and Hour blogs as new information becomes available.

Rebecca J. Bennett is a shareholder in Ogletree Deakins’ Cleveland office.

Keith E. Kopplin is a shareholder in Ogletree Deakins’ Milwaukee office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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