Overtime Pay for Work-Related Smartphone Use

Follow these steps to reduce your risk of overtime liability.

Key point 8-08.6. The Fair Labor Standards Act exempts employees employed in an executive, administrative, or professional capacity from the minimum wage and overtime pay provisions. To be covered by one of these exemptions, an employee must perform specified duties, and be paid a salary in excess of a specified amount.

A federal court in Illinois refused to dismiss a lawsuit claiming that the City of Chicago violated the Fair Labor Standards Act by failing to pay police officers overtime pay for the use of smartphones for work-related business during nonworking hours.

A Chicago police sergeant (the "plaintiff") sued the City of Chicago on behalf of himself and all other employees of the Chicago Police Department against the City of Chicago, alleging that the City violated the Fair Labor Standards Act ("FLSA") by failing to pay plaintiffs all the compensation they were due.

The plaintiff claimed that, at various points in the last three years, he and other employees of the police department were issued personal data assistants ("PDAs") or other electronic communication devices. He further alleged that:

  • he and other employees were "required to use" those devices to perform work outside of normal working hours without receiving compensation—including overtime compensation;
  • police work was "routinely and regularly accomplished through the use of these PDAs";
  • without these PDAs and the work routinely performed while off-duty, the police department would be far less successful in accomplishing its law enforcement objectives;
  • he received numerous telephone calls, e-mails, voice mails, and text message work orders on his PDA while off the clock, and was expected to respond to these communications throughout the night and into the early morning hours while off duty without being compensated for the time he spent doing so;
  • he and other employees were not paid overtime for the excess hours they worked during off-duty hours using their PDAs; and
  • the city did not keep appropriate records as required by the FLSA to determine wages, hours, and other conditions and practices of employment.

The plaintiff sought monetary damages in the form of overtime compensation equal to the unpaid compensation and overtime compensation due all police department employees, plus interest, and reasonable attorney's fees, costs, and expenses.

The city asked the court to dismiss the lawsuit for failure to state a claim upon which relief could be granted. The court declined to do so, noting that the plaintiff's claim had sufficient merit to proceed to trial. The court acknowledged that "de minimis" (i.e., minimal) compensable time is "not recoverable under the FLSA." It referred to a federal regulation that states: "In recording working time under the Act, insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded." 29 C.F.R. § 785.47.

This rule applies to "uncertain and indefinite periods of time involving a few seconds or minutes duration."

The city also argued that plaintiff failed to allege the amount of time he spent off duty, beyond a de minimis amount, responding to PDA communications that required his immediate response. The court responded: "Whether the amount of time plaintiff worked off the clock is greater than a de minimis amount, however, is a matter of the proof of his claim, not a matter of the sufficiency and plausibility of his complaint. We are mindful that some courts have required more detailed allegations as to the type and amount of work that allegedly earned FLSA overtime compensation …. [But] the elements that must be shown are simply a failure to pay overtime compensation … and failure to keep payroll records in accordance with the Act."

The court concluded:

The plaintiff pleaded that he was entitled to overtime pay because he "routinely and regularly" responded to phone calls, e-mails and work orders off the clock, as expected by the police department. He further has alleged that he was not paid for the excess hours worked, and that the city failed to keep appropriate records. These allegations of FLSA violations are plausible, and they give the city adequate notice of the claim. Whether plaintiff can prove what he has plead remains to be seen after discovery.

What This Means For Churches

This is the first case that we have seen to address employer liability for overtime based on employees' use of cell phones during non-working hours for business purposes. This court suggested that liability may arise, so long as the cell phone use is documentable and not "de minimis." The case now proceeds to trial, unless it is settled. Future developments regarding this and similar cases will be addressed in future editions of Church Law & Tax Report. For now, church leaders should consider some obvious steps to reduce this potential risk of an overtime pay liability:

  1. Only issue cell phones to employees who clearly satisfy the definition of "exempt employees" under the FLSA. Exempt employees include administrative, executive, and professional employees. Ministers generally are considered professional employees. See sections 8-08.5 and 8-08.6 in Richard Hammar's Pastor, Church & Law (4th ed. 2008) for a full explanation of these exemptions.
  2. If you currently issue cell phones to non-exempt employees, review each case to determine if there is a legitimate business need to do so.
  3. If you determine that a legitimate business need exists for issuing cell phones to one or more non-exempt employees, then require these employees to keep accurate records of their business use of the device that should be cross-checked against the church's monthly cell phone bills for confirmation. The employer has a duty under the FLSA to maintain these records. Obviously, this is going to be an administrative burden for the church that may prompt a reconsideration of which employees really need a church-provided cell phone.
  4. If you determine that a legitimate business need exists for issuing cell phones to one or more non-exempt employees, then consider a policy that requires these employees to leave their church-provided cell phones in their church office during non-working hours. Allen v. City of Chicago, 2011 WL 941383 (N.D. Ill. 2011).
  5. Employment Practices

    See (1) "Compensation," Allen v. City of Chicago, 2011 WL 941383 (N.D. Ill. 2011), and (2) "Minimum wage and overtime pay," Alcazar v. Corporation of the Catholic Archbishop, 627 F.3d 1288 (9th Cir. 2010), and (3) "Privacy," Duncan v. Peterson, 947 N.E.2d 305 (Ill. App. 2010), in the Legal Developments section of this website.

    Fair Labor Standards Act

    See "Minimum wage and overtime pay," Alcazar v. Corporation of the Catholic Archbishop, 627 F.3d 1288 (9th Cir. 2010), in the Legal Developments section of this website.

Minimum Wage Law and Private Schools

A court concluded that the minimum wage law applied to a church-run school.

Church Law and Tax 1991-11-01 Recent Developments

Employee Relations

A federal appeals court concluded that the federal minimum wage law applied to the staff of a church-operated school. A church in Little Rock, Arkansas, operates an elementary and secondary school that utilizes a self-study program that teaches all subjects from a biblical point of view. The school is an integral part of the church. Each class has a supervisor who is assisted by a classroom “monitor.” Both work with the children but do not conduct formal classroom instruction. Supervisors grade papers, answer students’ questions, conduct prayer, and counsel the students. Monitors perform duties equivalent to teachers’ aides in the public schools. The school requires that all supervisors and monitors be “born again” Christians. Supervisors receive compensation of $125 per week ($3.29 per hour for a 38-hour week), while monitors receive $100 per week ($2.63 per hour for a 38-hour week). The Department of Labor charged the church with violating the federal minimum wage law (Fair Labor Standards Act), and sought back wages of some $23,000 for 18 current and former supervisors and monitors. A federal district court upheld the government’s position, and the church appealed. A federal appeals court agreed that the federal minimum wage law applied to the school’s employees, and it upheld the award of back pay. It emphasized that the minimum wage law specifically applies to church-operated school employees, and it rejected the suggestion that the supervisors and monitors were exempt from coverage on the ground that they are “ministers.” The court relied heavily on another federal appeals court ruling in Dole v. Shenandoah Baptist Church (discussed in detail in previous issues of this newsletter). DeArment v. Harvey, 932 F.2d 721 (8th Cir. 1991).

Fair Labor Standards Act

FLSA Applied to Contractor Used by Church Vocational Program

A local church had established a vocational training program allegedly to further its religious mission,

A local church had established a vocational training program allegedly to further its religious mission, and used a commercial construction company to implement the program. The church argued that the Fair Labor Standards Act could not be enforced against the church, even though members of the church allowed their children to be employed by a commercial enterprise in violation of the prohibitions against child labor, minimum wage, and overtime compensation, because the children were participating in a vocational training program established by a church which was constitutionally protected by the guaranty of religious freedom.

The court concluded that the Fair Labor Standards Act did apply to a commercial contractor used by a church as part of its vocational training program. The court added that "the FLSA is a reasonable, nondiscriminatory regulation by an act of Congress, one purpose being to prevent the exploitation of children in the labor force, and its enforcement (even as to employees of a church engaged in commercial activity no matter what their religious conviction) does not violate the constitutional provisions guaranteeing the free exercise of religion." Shiloh True Light Church of Christ v. Brock, 670 F. Supp. 158 (W.D.N.C. 1987)

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