Tenth Circuit Confirms That Time Devoted To Booting Up Work Computer and Launching Software Is Compensable Under the Fair Labor Standards Act

In a holding with potentially wide applicability, the Tenth Circuit ruled that time devoted to booting up a work computer and launching certain software before clocking in is compensable under the Fair Labor Standards Act of 1938, 29 U.S.C. §§201-19 (FLSA), when these activities are integral and indispensable to an employee's principal work activities. Peterson v. Nelnet Diversified Sols., — F.4th —, 2021 U.S. App. LEXIS 30273 (10th Cir. Oct. 8, 2021). The circuit court also held that, even when employees' individual and total aggregate claims are relatively small, an employer is not excused from providing compensation "[in] the absence of any significant practical administrative burden in estimating the amount of time involved." Id. at *36.

The Underlying FLSA Collective Action

Nelnet Diversified Solutions is a student loan company that employs call-center representatives (employees) who "service student loans and interact with debtors over the phone and through email." Id. at *3. Nelnet pays these employees "once they clock into the timekeeping system at their individual workstations." Id. But the employees must perform several preshift tasks before they can clock in. Id. Specifically, they must first wake up their work computers, insert a security badge, and enter their credentials. Id. The computer then automatically launches a software program, which in turn loads the timekeeping system. Id. Once the software is loaded, they have access to the timekeeping system and may clock into the system. Id.

A Nelnet employee filed an FLSA collective action—to which over 350 individual employees opted in—alleging that Nelnet failed to pay its call-center employees for time devoted to booting up their work computers and launching certain software before they clock in. Id. at *4. The parties filed cross-motions for summary judgment on whether these preshift activities were compensable work and, if so, whether the time the employees devoted to these activities was de minimis such that Nelnet need not compensate them for it. Id.