What Is the Portal-to-Portal Act?

Employment attorneys are often asked whether the Portal-to-Portal Act deems specific activities as compensable. Some questions involve time spent traveling, logging onto computer systems, or answering emails after work hours. These days, questions also revolve around whether workplace measures taken to fight COVID-19, such as the time employees spend in daily health screenings at the start of the day, are compensable. The answer begins with an amendment to the federal Fair Labor Standards Act (FLSA) that was passed almost 70 years ago.

Some history behind the FLSA

The FLSA was enacted in 1938. As a result, employers pay employees for "compensable working time" under federal law. In an early ruling on the FLSA, the U.S. Supreme Court ruled that compensable time under the FLSA includes employees' activities that are "controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business."

The same lawsuit also ruled that "all time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed workplace" is compensable. In general, the Act's provisions define compensable working time as the time an employee spends working for the employer's benefit. However, shortly after that decision, the nation's top court also ruled that compensable work time included the time employees spent walking from the factory entrance to their work areas. This broad definition of compensability prompted an outpouring of lawsuits. In response, Congress passed the Portal-to-Portal Act so that these types of activities would not be compensable. At the 1947 signing of the law, President Harry S. Truman said it was aimed at relieving employers from "potential liability for billions of dollars in the so-called 'portal-to-portal' claims" that had emerged since the court ruling.

Non-compensable working time under the Portal-to-Portal Act

The Portal-to-Portal Act provides that employers do not need to compensate employees for:

• Traveling to and from the actual place of performance of the principal activity or activities which an employee is employed to perform, and
• Activities that are preliminary or postliminary to the employee's primary activity or activities

In 2014, the nation's top court again weighed in on the matter. It concluded that pre- and post-shift tasks that are an "integral" and "indispensable" part of a worker's job duties must be compensated. In general, employers don't have to pay for:

• Travel to or from work
• Before or after work activities that are incidental

As a result and depending on the circumstances, time spent doing activities that are pre-work shift or post-work shift "may or may not" be compensable under the Fair Labor Standards Act,  according to the U.S. Department of Labor.

What is compensable working time?

Determining compensable work time is not always clear-cut. Employers generally don't have to pay a worker for the time spent washing up before or after work. However, if the job involves hazardous materials, employers may have to pay for time spent washing up because it is integral and indispensable to worker safety. There have been several instances of courts finding that preliminary and postliminary employee activities are compensable.

A restaurant's case

Maggiano's, a Philadelphia-based Italian restaurant, paid $116,308 in back wages in 2021 to settle charges by the U.S. Department of Labor. The DOL asserted that the eatery violated the FLSA by failing to pay workers for the time they spent attending meetings before the start of the work day. "Many chain restaurant managers hold pre-shift meetings to motivate their employees, reinforce training, update the day's menu, and, ultimately, maximize profits. The time spent in these meetings is typically time for which employers should also be paying their workers," the Labor Department said in the statement announcing the settlement.

Defined compensable prison duties

Prison officers' pre-shift and post-shift activities were to be compensable under the FLSA. A federal appeals court ruled in 2020 that security screenings, pre-shift briefings, and checking specialized keys and equipment in and out of the inventory-control system were compensable activities.

A yoga studio learned more about proper Portal-to-Portal pay practices

A group of yoga instructors settled their lawsuit against CorePower Yoga in 2019. The company paid $1.5 million to settle allegations that the workers were not paid for the time spent preparing for classes. The plaintiffs alleged the company violated both state and federal law. The instructors' complaint said they were not paid for activities such as:

• Developing and practicing yoga routines
• Creating music playlists
• Reading and writing work-related emails

The plaintiffs said the actions are "essential and integral" to their job.

A bank's settlement example

PNC Bank settled a lawsuit in 2020 for $2.75 million brought by a group of former customer service reps over preliminary and postliminary work activities. The workers said they were often required to:

• "Work off the clock"
• Wait to clock in until after they had booted up their computers, read emails, and reference materials
• Clock out before shutting down their computers at the end of each shift

The reps said in court papers that PNC failed to accurately track or record their actual hours worked. The plaintiffs said they often worked as many as 3 unpaid hours of overtime each week.

Health screenings and compensable time

More recently, the on-site, pre-shift health screenings for the coronavirus and other pandemic-related tasks have created questions about compensability. The U.S. Department of Labor's guidance states that employees' time spent on required COVID tests or vaccines may be compensable depending on whether or not it occurs during regular working hours or at the employer's direction on days off. Lawsuits asking for employee pay for time spent on COVID-19 testing and screening are winding their way through the courts. But, so far, legal tribunals have come to different conclusions over the issue. In 2022, one California federal court ruled that time spent on pre-shift COVID-related screens was not compensable under the FLSA because such activities were not "integral and indispensable" to the employee's principal activities. However, another California federal court concluded that because screenings were intended to prevent outbreaks that would disrupt business operations, this activity was indispensable to the employees' principal duties and, therefore, compensable time.

A Portal-to-Portal employer defense

Employers don't have to compensate employees for activity that takes up only a small amount of time. The FLSA, and various state laws, call this the de minimis doctrine. However, creating "hard and fast rules" to define the issue can be difficult.

The shoe company Converse successfully used the legal defense in a 2017 court case over mandatory bag checks. According to a California federal court ruling, employers didn't have to pay workers for their time because each bag check took less than 10 seconds.

Check State and Local Law

Employers should check state and local wage and hour laws to see what they have to say about the compensability of pre- and post-shift work activities. States such as California or New York should pay particular attention since they have a history of approving strong worker protections. A major tech company recently settled a longstanding lawsuit. The suit alleged that the company's California employees should have been paid for the bag searches; a security measure they had to undergo when they left its stores for meal breaks and after clocking out for the day. The plaintiffs said the process took about 1 hour a week. Apple paid about $30 million to settle the class-action suit charging that the lack of compensation during these processes violated California labor law.

Conclusion

Employers looking to avoid wage and hour claims should tread carefully when requiring employees to engage in mandatory unpaid-work activities.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

This post may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.