By Chris Morehead
For the Oregon Beer Growler
As Oregonians, we are lucky to be part of a community where so many businesses make significant investments — whether in the form of volunteer time or monetary contributions — to organizations that support important local social causes. Many, if not most, of us have volunteered time and energy advancing these projects, such as spending time at food banks, working on conservation projects, serving as a pen pal for students, etc.
Of course, breweries (and many other craft beer industry members) generally don’t shy away from opportunities to give back to their respective communities. In fact, more and more breweries — consistent with a national trend among progressive and forward-thinking firms — are actively encouraging their employees to participate in community service. Some breweries have offered to pay employees their hourly rate for time spent engaged in community service, while other businesses have incorporated the number of hours spent volunteering for community service activities into employees’ performance evaluations. Generally speaking, that’s all well and good. But there are some very important employment law considerations that should be considered before deciding to tell employees to spend more time volunteering.
If you can think of a scenario where an employer asks an hourly employee to do a task, regardless of how attenuated the ties are to the employer’s business, odds are a wage and hour regulation will be implicated. With respect to employees engaged in community service activities, the relevant provision employers need to be aware of is 29 CFR 785.44, which regulates civic and charitable work performed by employees. The regulation relates to the Fair Labor Standards Act (FLSA), which governs wage and hour issues at the federal level. It states that “[t]ime spent in work for public or charitable purposes at the employer’s request, or under his direction or control, or while the employee is required to be on the premises, is working time. However, time spent voluntarily in such activities outside of the employee’s normal working hours is not hours worked.”
There’s a lot of information to unpack in those two sentences. Probably the most important terms, however, are “working time”/“hours worked.” Under the FLSA, an employee must be paid hourly wages for “working time,” with the primary exception belonging to properly-classified exempt employees. Employees that aren’t compensated for “working time” have a viable wage claim with a two year statute of limitations (three years if the violation is willful). Taking the next step, these hourly employees must be paid for community service performed (1) at their employer’s request, (2) under the employer’s direction or control, or (3) while the employee is required to be on the premises. Facially vague, these categories have been the subject of numerous interpretations over the years. However, there are several important takeaways for craft beer industry employers.
The easiest is to pay hourly employees for time spent engaging in community service activities at the company’s behest. A common oversight is when an employer tells workers that the “team” is going to volunteer at, for example, a food bank and insinuates that the employees should be present, but doesn’t sufficiently advise employees that the event is truly voluntarily. Taking the next step, employers should refrain from disciplining (written or orally) employees who don’t partake in these voluntary community service events, as such adverse action suggests that the community service was a condition or term of employment. With respect to evaluations, promotions, etc., employers shouldn’t base their decision on time spent on community service unless the employer is willing to pay for it. In other words, hourly employees should not feel that time spent performing community service is in any way tied to his or her compensation or evaluations.
The potential consequence of not complying with 29 CFR 785.44 is a wage claim. And while the chance of one employee potentially demanding wages for a few hours of community service doesn’t sound that scary, it is worth noting that when these claims are litigated, they virtually always turn into class action lawsuits. So make sure your hourly employees are being paid for community service hours performed on your company’s behalf.
Chris Morehead is an attorney in the Portland office of Ogletree Deakins, a national labor and employment law firm. He focuses on hospitality employers, with an emphasis on the craft beer industry. He can be reached at email@example.com or 503-552-2140.