Legal Alerts

Tenth Circuit Reprograms FLSA Liability for Computer Boot-Up Time

Wichita, Kan. (January 6, 2022) - While employers were busy dealing with the pandemic and the on-again/off-again world of the OSHA ETS orders, the Tenth Circuit further complicated the timekeeping responsibilities of employers. Employers across the country use computer software to track employee time. On a typical day, hourly employees across the nation boot up their computers, log in to their timekeeping software, punch the digital clock, and begin work. Now, according to the Tenth Circuit, employers must pay employees for the computer “boot up” time.

In Peterson v. Nelnet Diversified Sols., which arose from the District of Colorado, the Tenth Circuit ruled that time devoted to booting up a work computer and launching certain software before clocking in is compensable under the Fair Labor Standards Act (FLSA) because the activities are integral and indispensable to an employee’s principal work activities. In reaching its conclusion that the activities were “integral and indispensable” to principal work activities, the Tenth Circuit punished employers for stepping out of the punch-clock line and into the digital conveniences of the 21st century.

Peterson involved employees at a student loan servicing center. A typical employee would complete the following steps before beginning work: (1) wake up the work computer; (2) log in to the work computer using a password and security badge; (3) load a Citrix software program, which booted a remote desktop including a link to the timekeeping software; (4) access the timekeeping system; and (5) clock in to work for the day. On the same remote desktop, the Peterson employees also had access to email systems, communication systems, and student loan data that the employees used to perform their jobs.

Because the employee’s email system and student loan data were stored on the same network as the timekeeping software, the court viewed the software as inseparable, holding that “booting up” the computer was integral to the employee’s work. The Tenth Circuit also rejected the argument that the lost time (expertly evaluated at about $0.48 per shift) is de minimis – so minimal that the time lost is irrelevant – because there is no “significant practical administrative burden in estimating the amount of time involved.”

The Tenth Circuit’s opinion penalizes employers for adopting the digital realities of the 21st century and making their employees lives more convenient by not requiring them to clock in at a separate workstation. The Tenth Circuit opinion will have a wide impact. We anticipate “boot-up” time lawsuits will be filed across the country in 2022. For employers, the best path forward is probably the simplest – have your timekeeping software give each employee an extra two or three minutes for “boot up” computer time by rounding down the employee’s actual login time. Adjusting the login time for employees should address the de minimis concerns identified by the Tenth Circuit. Employers in Kansas, Colorado, Utah, Oklahoma, Wyoming, and New Mexico should act and evaluate potential liability and reconcile any discrepancies before any action by an employee or the Department of Labor.

For more information on this decision, contact the authors of this alert or visit our Labor & Employment Practice page to find an attorney in your area.

Authors:

Jeremy K. Schrag, Partner

Colby M. Everett, Associate 

Jon Olafson, Partner

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