When Is Work Compensable?

It's not always clear whether you need to compensate your nonexempt employees in certain situations. Here are some instructive examples and how they're treated under the Fair Labor Standards Act. (Titled "Compensable-Time Quandaries" in the print edition.)

Association employees aren't behind-the-desk types. They travel frequently, attend conferences and meetings, and network with members and colleagues after hours. Nonexempt employees—those whose wage-and-hour treatment is governed by the Fair Labor Standards Act (FLSA)—often play supporting roles in association functions or participate in association-sponsored activities that stray outside of normal work hours. When that happens, association HR executives need to tread carefully.

Wage-and-hour lawsuits outpace all other types of employment litigation for nonprofits, and federal and state labor departments vigorously enforce compliance with the FLSA and its complex regulations, says Jeffrey Tenenbaum, partner at Venable LLP.

Among other things, compensable time under the FLSA usually includes:

  • All time the employee is required to be at work;
  • Time spent working offsite or at home;
  • Overtime hours (any compensable time that exceeds 40 hours in a workweek), even if the employer did not authorize the overtime in advance.

Whether time is compensable under the FLSA depends on the circumstances, Tenenbaum says, and associations should seek legal advice if they're unsure how the law applies to a particular situation. But for a quick study, the hypotheticals in the chart on this page offer a glimpse at a few common compensable-time quandaries for nonprofits.

Hypothetical Is the time compensable?
An administrative assistant is reading a novel at his desk while waiting for an assignment. Yes.
During regular work hours, a research assistant attends a continuing-education seminar that will improve her research skills. Yes.
An employee arrives to work 30 minutes early every day due to her commuter-bus schedule and starts working but does not record this time on her weekly timesheet. Yes.
An employee is invited to dinner with members of the association at the annual conference but is not required to attend and is free to make other dinner plans. No, as long as there is no coercion.
An employee volunteers to participate in an association-organized trip to build houses for Habitat for Humanity. Yes, if he is under employer direction or control.
An employee takes a four-hour plane trip to a weeklong conference during nonshift hours but performs no work on the plane. No.
An employee whose regular commuting time is 30 minutes takes a three-hour train ride for a one-day trip to another city during regular shift hours and performs no work on the train. The 2.5 hours not part of the regular commute is compensable.
A staff IT specialist volunteers to be a greeter at the association's annual fundraiser for two hours outside of regular working hours. No, as long as there is no coercion.
Source: Venable LLP