Employees get paid when they are required to show up early but there is no work to perform

The Second Circuit has revived a wage-and-hour lawsuit alleging that Lidl required employees to arrive 15 minutes before their shifts but did not pay them when managers were late unlocking the stores. The court held that the Fair Labor Standards Act can require employers to compensate employees for waiting time when the employer requires them to report for work at a designated time but prevents them from starting their jobs. 

The case is Santos v. Lidl US, LLC, issued on October 13. Santos worked as a store clerk and stocker at Lidl grocery stores on Long Island. Her opening shift was scheduled to begin at 5 a.m., but Lidl required her and other employees to arrive 15 minutes earlier. Sometimes, the stores remained locked because opening managers did not arrive until 5 a.m. or later.

Employees could not clock in until they entered the stores. This meant that, when managers were late, employees had to wait outside without pay despite having reported to work at the time Lidl required. This happened approximately once a week, costing her 15 minutes of wages. During five weeks, the unpaid time also resulted in lost overtime compensation.

Santos brought claims under the FLSA and New York Labor Law, seeking unpaid wages on behalf of herself and other employees. The district court dismissed the claims, reasoning that the Portal-to-Portal Act excluded the waiting time from compensable work. The Court of Appeals revives the case.

The Second Circuit (Robinson, Rakoff [D.J.], and Sullivan in dissent) notes that the Portal-to-Portal Act generally excludes time spent on activities preliminary or subsequent to an employee’s principal job duties. But the statute does not categorically exclude all waiting time before a shift. The Department of Labor’s regulations distinguish between employees who are “engaged to wait” and those who are “waiting to be engaged.” An employee who voluntarily arrives early and waits for work generally is not entitled to compensation for that time. By contrast, an employee who must report at a particular hour, is ready and willing to work, and cannot begin working for reasons beyond the employee’s control may be entitled to compensation.

Plaintiff plausibly alleges compensable waiting time. At the pleading stage, the court had to accept her allegations that Lidl required her to arrive at 4:45 a.m. and that she sometimes could not enter the store because her manager had not arrived.

The court rejected Lidl’s argument that the claim was too trivial to be actionable under the FLSA’s de minimis doctrine. Under Second Circuit precedent, courts consider the difficulty of recording the time, the aggregate amount of compensation at stake, and the regularity of the activity. Because Santos alleged 15 minutes of unpaid time each week, the court could not conclude from the complaint that the time was insignificant or too difficult to record. Employers cannot automatically disregard regularly occurring, readily ascertainable working time merely because each individual period is short.