Seventh Circuit: Conditions on Non-Compensable Work Allowed
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APPLIES TO All Employers with IL, IN, and WI Employees |
EFFECTIVE October 5, 2023
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QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
In Meadows v. NCR Corp., the Seventh Circuit Court of Appeals ruled employers that pay for otherwise non-compensable pre- or post-shift activities can impose conditions on that pay. Here, the plaintiff was a customer engineer servicing point-of-sale systems and ATMs. Off-the-clock work was prohibited and work done during regular shifts was to be recorded electronically. If overtime was performed outside this policy, then that time was paid as long as it was recorded in the timekeeping system. The plaintiff performed pre- and post-shift activities and other work during unpaid meal periods like reviewing email, mapping the service route, reviewing work orders, and responding to work calls. His unauthorized overtime was paid but work that was not recorded was not paid per policy. The plaintiff sued for payment of the unrecorded overtime under the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law.
The court ultimately found the work the plaintiff performed that was unrecorded was not integral and indispensable to the principal activities of servicing the employer’s systems. Rather, they were incidental to the commute in a company vehicle. The time could be compensable, however, if the employer had a practice of paying for those activities through an express contractual provision or through a custom or practice. Adopting a custom of paying employees for non-compensable activities means the employer also has the discretion to place conditions on that custom.
Action Items
- Review overtime and non-compensable time pay practices for compliance.
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