Earlier this year, Douglas Haegg filed a collective and class action complaint against Magellan Health, Incorporated, claiming “reckless disregard of the [Fair Labor Standards Act] and Arizona wage and hour laws.” He was employed by the company as a Customer Service Representative and claims that he was never paid for time spent on required preliminary and postliminary job duties.
Haegg worked for Magellan from September 2018 to September 2019 in Prescott, Arizona, at one of the many call centers the employer operates across Arizona, California, Washington, DC, Missouri, and Pennsylvania.
The lawsuit alleges that customer service representatives are not permitted to clock into work until after their computers had completely booted up and they were fully logged into all the required programs, which took on average about 15 minutes each day. Additionally, workers at the call center were required to clock out first before logging off and shutting down the computers, accounting for about 10 minutes each day at the end of the shift.
Federal and state labor laws require compensation for time spent performing necessary preliminary and postliminary activities outside of an employee’s normal job duties. The Fair Labor Standards Act (FLSA) monitors the minimum wage, overtime pay, and recordkeeping for most private-sector employees.
Under Chapter 29 of the Code of Federal Regulations (CFR) section 553.21, “compensable hours of work…includes all pre-shift and post-shift activities which are an integral part of the employee’s principal activity, or which are closely related to the performance of the principal activity.” Additionally, Chapter 29 CFR Section 790.8 furthers this point by stating that employees must be paid for “closely related activities which are indispensable to its performance.”
A workweek includes any time an employee is required to be on the employer’s premises or duty and therefore may be longer than the scheduled shift. One main clause of the FLSA that this lawsuit hits on is the “suffered or permitted to work” by an employee, which means any work performed by an employee must be compensated. The lawsuit argues that the employer omitted tasks that are protected under the FLSA from the compensable time of an employee.
If an employee performs covered work for more than 40 hours in a given workweek, they will be compensated with overtime pay, which is no less than one and one-half times the employee’s regular base pay as stated in Chapter 29 of United States Code Section 207. The FLSA does not put a maximum number on the hours that can be worked in a week and does not require overtime pay for hours worked on the weekends or holidays unless they are over the forty-hour threshold.
Arizona and federal law both require the employer to keep records of basic biographical information of the employee, payroll status, and the total hours worked each day and each week. Haegg claims that Magellan “failed to establish, maintain, and preserve accurate timesheet and payroll records” making it easier for the company to not pay the correct compensation for work that was suffered or permitted.
Not all employees are covered under the overtime and minimum wage requirement of the FLSA. Under Section 12(a)(1), bona fide executive, administrative, professional, and outside sales employees are exempt. In all categories of exemption, the employee must make at least $684 per week.
In Fiscal Year 2021, the Wage and Hour Division (WHD) of the Department of Labor recovered more than $230 million in total back wages for employees across the country, including minimum wage and overtime wage abuses. More than 24,700 compliance actions were filed, and more than 190,000 workers were helped in getting back stolen wages.
