On July 21, 2021, in the case of In Re: Amazon.com, Inc., the Supreme Court of Pennsylvania ruled that employees must be paid for the time spent waiting to undergo and undergoing mandatory workplace security screenings under the state’s Minimum Wage Act (PMWA). This decision may have far reaching implications for employers and their bottom lines. Indeed, many employers may find this requirement even more disappointing, given that they are just now recovering from stretched budgets and depressed revenues related to the pandemic.
In the case, Amazon workers were made to wait in line and undergo security screenings at an Amazon facility in Breiningsville, Pennsylvania, before departing the work facility. Those workers sued, claiming they should have been paid for that time. Notably, in a virtually identical case filed against Amazon in Nevada, a federal court held that employees did not have the right to be paid under the federal minimum wage and overtime law, the Fair Labor Standards Act.
The Pennsylvania Supreme Court saw things differently. That is because the claim for pay confronted by the Pennsylvania Supreme Court was based on the PMWA, not federal law. Relying on the difference in language between the federal minimum wage and overtime law and its state counterpart in Pennsylvania, the Court said that Pennsylvania employers must pay employees for all time they are required to be on site, regardless of whether the employees are engaged in work duties, except for (1) time allowed for meals (unless the employee is required or permitted to work during that time), and (2) time spent on the premises of the employer “for the convenience of the employee.”
Moreover, the Pennsylvania Supreme Court went further and held that, although the federal law permits de minimus exceptions to the requirement that employers pay employees for all hours worked, where the amount of unpaid time is trivial, Pennsylvania law is not so forgiving and the de minimus exception does not apply.
The Pennsylvania Court ruling, though binding, was not unanimous. According to the dissent, the majority ruling “appears to expose employers to suit for failing to pay overtime for a wide-ranging array of activities outside the sphere of what would traditionally and reasonably be considered as work … pre- and post-shift activities in the nature of: swiping security cards at turnstiles, opening doors, pushing elevator buttons, and traveling hallways to arrive at and depart work stations or swipe-or-punch-card locations.”
This case highlights the need for employers to understand and account for the sometimes subtle differences under federal and state employment laws, and particularly in the realm of overtime pay now that the Commonwealth’s highest Court has spoken.
Practically speaking, Pennsylvania employers should take immediate steps to review and adjust their payroll practices to make sure that employees are paid for all time they are required to be at the worksite, except for meal time and time spent there for the employee’s own convenience. And, employers should also consider the budgetary impact of this requirement and whether it is necessary to modify work hours, screening procedures and other related personnel policies.
Our team of attorneys is here to answer and assist you in navigating the rules governing PMWA and FLSA. Contact us today.