The U.S. Court of Appeals for the Third Circuit recently upheld a decision awarding $22.25 million in backpay to nearly 12,000 employees of East Penn Manufacturing. A federal jury previously found the Pennsylvania-based company violated the Fair Labor Standards Act (FLSA) by not compensating workers for all time spent showering and changing.
The court ruled that these activities were integral to the job due to the hazardous materials involved. The verdict emphasizes the importance of paying employees for all hours worked, not just what is deemed reasonable by the employer.
The company made a critical mistake in defining “reasonable”
East Penn’s primary error lay in its assumption that paying employees for a “reasonable” amount of time to change and shower was sufficient. A U.S. Department of Labor (DOL) investigation launched in 2016 revealed that the company failed to pay nonexempt workers for all time spent on these necessary activities.
The company manufactures lead-acid batteries, a process involving exposure to lead and other toxic substances. Consequently, many employees must wear uniforms and personal protective equipment (PPE) during shifts, and shower afterward to guard against contaminants.
Initially, the employer granted workers only five minutes to change clothes and shower at the start and end of shifts – later increasing it to 10. However, East Penn didn’t track the workers’ actual time for these tasks. The court found that workers averaged more time than allotted, making the employer liable for the additional wages, including overtime.
The appeals court soundly rejected the company’s argument
In its appeal, East Penn argued that its payment for designated grace periods was adequate and lawful. It also claimed paying workers for “actual time” might encourage them to waste time or lead many to “dragging their feet.”
However, the appeals court disagreed, reinforcing the FLSA’s requirement to pay for all time worked. The court noted that employers can discipline employees who misuse time but cannot withhold wages for work completed.
The ruling aligns with previous decisions emphasizing the necessity of compensating workers for all integral and indispensable activities related to their duties, including preparatory steps prior to a shift start, and end-of-shift tasks that must be completed before leaving the workplace.
Key takeaways from the ruling
This case highlights the importance of vigilant time-tracking and compliance with wage and hour laws. Employers should ensure that all time worked is recorded and paid.
Also, grace periods should reflect the necessary time to accomplish work duties to prevent legal issues. Additionally, employers should conduct regular audits of work processes and compliance training for managers to help identify unpaid activities and ensure adherence to labor laws.
Understanding your rights as an employee under the FLSA is essential. This ruling serves as a reminder that failure to pay for all time necessary to do the work, which may be deemed “minor” by employers, can lead to significant financial consequences for workers, underlining the importance of vigilant compliance with labor standards.
Similar laws in Maryland, Virginia, and Washington, D.C. protect workers’ rights to fair compensation for all hours worked.
