Employer Takeaways from the Amazon Supreme Court Decision

In a recent unanimous decision, the Supreme Court ruled that a staffing agency does not have to pay workers at Amazon warehouses for the time they spend waiting to go through anti-theft security screenings at the end of their shift.

The decision, written by Justice Clarence Thomas, hinged on amendments made to the Federal Labor Standards Act (FLSA) by the Portal-to-Portal Act (1947), which generally excludes "preliminary" or "postliminary" activities (activities that take place before or after the workday proper) from compensable work time. In 1956, the Court further interpreted the Portal-to-Portal Act as requiring employers to only pay for activities that are an "integral and indispensable part of the principal activities" for which the workers were employed (Steiner v. Mitchell).

Since the principal activities of the workers in this case involved retrieving and packaging product, the Court ruled that the screenings did not qualify as an "intrinsic element of the job," and that Integrity was not required to pay employees for the time it took to go through the metal detectors.

The reaction to the decision has been mixed. While it's largely being hailed as a victory for retailers and other companies like Amazon, others are calling the ruling "unconscionable."

So what should employers take away from this decision?

While the Court ruled in favor of the employer [Amazon] in this case, employers should be wary about using this decision as a basis for creating policies about activities that workers will or will not be paid for.

The fact is that there are many pieces of legislation other than the Portal-to-Portal Act that define what qualifies as "work time," chief among these being the Fair Labor Standards Act (FLSA). In this one act alone, there are several rules and regulations that determine whether an activity is considered an "integral and indispensable” part of the activities an employee performs as part of their workday.

Take, for instance, something like work travel: While the time an employee spends commuting from his or her home to his or her place of employment is generally not considered work time, the time that an employee spends traveling as part of their principal work activity during the workday (like traveling to and from job sites) is considered work time, and must be counted as hours worked.

Consider, then, an employee who regularly works in one city but is given a special, one-day assignment in another city and returns home to their normal city the same day. The time this employee spends traveling to and from the other city would be considered work time. However, an employer may choose to deduct the time that an employee would normally spend commuting from their home to their regular worksite from the time that the employee is compensated for the out-of-city travel.

Human resources compliance issues like the one illustrated above can be so complicated that designing employee policies to regulate them can seem impossible, or, at the very least, confusing. That's why many companies are turning to outside HR consulting firms to provide guidance on creating policies and procedures that are both compliant and clear for their employees.

The experienced HR professionals at G&A Partners understand the nuances of federal, state and local labor laws, and can help your company expertly execute procedural tasks surrounding government compliance. With G&A Partners managing your HR labor law and HR compliance, you can rest assured that your company is protected from the risk of human resources noncompliance.

This post was inspired by an article written by Adam Liptak for The New York Times. To view the original story, please visit: //www.nytimes.com/2014/12/10/business/supreme-court-rules-against-worker-pay-for-security-screenings.html.