The Dangers of Using Two Different Time Clocks

It seems it would be a no-brainer.  You have one employee who works two different shifts, or even two completely different jobs.  You set the employee up on two different time clocks so you can track the time the employee spends in each position.  This can be helpful, especially if the employee is working at two different rates.  However, what if the employee works over 40 hours in a workweek on the two positions combined.  Is the employee entitled to overtime pay?  

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The Attack of the Unpaid Interns

We’ve warned before about the potential issues raised when you utilize unpaid interns.  Employers used to be able to take a level of comfort from internships run through educational institutes but, no more. 

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Under New York Law, Are You Required to Pay Your Employees for Their Breaks or Not?

As noted in our recent blog, Under Federal Law, Are You Required to Pay Your Employees for Their Breaks or Not?, various states and localities may have their own break laws and regulations that could apply to your business.  Those laws could cause even more confusion with as to if, whether to pay employees for breaks and/or meal time.  New York is among the states with specific laws on breaks.  

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Under Federal Law, Are You Required to Pay Your Employees for Their Breaks or Not?

An area of confusion for many employers, and thus an area in which wage and hour laws are often violated, involves breaks and meal periods.  Specifically, are employers required to pay their employees for break and/or meal time, and if so, when? This area of confusion has resulted in Auto Cricket Corp., doing business as AutoCricket.com, paying 414 employees a total of $76,589 in back wages following an investigation by the U.S. Department of Labor's Wage and Hour Division.  

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Are You Paying Your Workers Enough?

Minimum wage is still an issue for many employers, as two agriculture employers recently learned.  And willful, repeated violations of the law can cause the U.S. Department of Labor (“DOL”) to make a federal case of the issue. 

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How Not To Respond To A DOL Audit: Fur Company Gets Its Hide Tanned By the DOL

Accused of doing just about everything wrong possible under the wage and hour law, a Boston processer of hides and furs is being sued by the DOL in federal court seeking $1,000,000.00 in back wages and damages.  According to the DOL, the company engaged in repeated “knowing, deliberate and intentional violations.” 

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DOL Investigation Shows Need to Classify Employees Properly

A recent settlement between the US Department of Labor and First Republic Bank aptly illustrates the perils of misclassifying large numbers of employees under the overtime laws. 

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Lawsuits by Restaurant Employees Keep on Coming

As discussed in our previous blogs, complaints by restaurant employees seem to be a big trend, and that trend seems to only continue to grow – and not only in New York City.  

 
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New Jersey Pay Parity Bill

New Jersey’s Governor Chris Christie recently signed the Gender Pay Parity Bill (the “Bill”) which impacts New Jersey-based companies that employ fifty or more individuals.  Under the Bill, employers must post as well as physically provide a new notice to their employees to inform them of their right to be free from gender-based discrimination in the workplace.  

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DOL Regulation Exposes Restaurants to Liability; Restaurant Trade Association Sues to Reverse

Restaurants and other employers who have tipped employees may face significant liability if they redistribute tips among employees in violation a new regulation issued by the Department of Labor (“DOL”).   Restaurants who take a tip credit (i.e. pay a lower hourly wage based on tips employees receive) against their employee minimum and overtime wage obligations, have always needed to follow very specific guidelines should they pool and redistribute tips of tipped employees (a “tip pool”). The DOL’s new regulation and guidance it provided earlier this year require that all employers that have a tip pool must follow the DOL guidelines, even if the hourly wages paid to their employees before tips exceed federally mandated minimum wages (i.e. even if the employer does not take a tip credit).  In short, the DOL is taking the position that employees’ tips are the property of the employee and may only be redistributed amongst employees as the DOL has authorized.  In response, the Restaurant and Trade Association (“RTA”) has filed a lawsuit suit which seeks to invalidate this regulation as it applies to employers who do not take a tip credit. 

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Second Circuit Finds Blue Collar Managers to be 'Bona Fide Executives'

If somebody told you that they were classified as a ‘bona fide executive’ at work, images of the classic corner office along with a personal assistant and a generous expense account may come to mind.  Clearly, this could be a person who is living the good life.  But one who is considered a bona fide executive in the eyes of the law is quite different.  This was made clear in the Second Circuit’s decision this past July in Ramos v. Baldor Specialty Foods, Inc.,.  

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Hearst Intern can proceed as an FLSA Collective Action Litigation

 As we reported earlier this year, an unpaid intern had sued the Hearst Corporation asserting that she was improperly classified as an intern and should have been considered to be an entry-level employee entitled to employee pay and benefits.  Her case is proceeding in court in New York and the judge recently issued an Opinion and Order permitting her to proceed with her case as a type of class action. 

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Misapplied Overtime Exemption Can Result In Millions of Dollars in Payments For Wage Violations

The U.S. Department of Labor (DOL) announced on May 1, 2012, that in accordance with a settlement agreement, Wal-Mart Stores Inc. has agreed to pay $4,828,442.00 in back wages and damages to more than 4,500 employees nationwide and $463,815.00 in civil money penalties for misclassifying employees and associated violations of the overtime provisions of the Fair Labor Standards Act (FLSA), the federal wage and hour law.  

 

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Government Agencies Declare Class(ification) War

The level of scrutiny placed on the ways in which employers classify those who work for them is likely to increase in the near future: the Congressional budget includes $14 million to combat misclassification and recover unpaid taxes and $4 million for personnel at the DOL Wage and Hour Division to investigate misclassification.

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DOL Clean Up Sweeping the Nation

Following up on our blog post on the Department of Labor’s (“DOL”) restaurant clean up initiative, recent DOL press releases demonstrate that efforts to penalize restaurant industry employers who are not FLSA compliant are only increasing.

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Scantland Case A Knight in Shining Armor for Cable Companies?

In a recent Florida case, Scantland v. Jeffry Knight, Inc., the court handed employers a victory when it applied the economic realities test to find that service technicians for a cable company were properly classified as independent contractors. The court made this finding despite the technicians’ relationship with the employer having several features that could support an employer-employee relationship.

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DOL Restaurant Clean Up Continues

As part of an ongoing restaurant industry enforcement initiative, the Department of Labor recently levied a total of $1,307,808.00 in fines to Massachusetts area restaurants for various Fair Labor Standards Act violations. 

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There's More Than One Way to Sink a Ship

Following an investigation by the Department of Labor’s Wage and Hour Division , Norwegian Cruise Line is being asked to pay $526,602.00 in back wages.

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The Danger of Unpaid Interns

In another of what appears to be a potential series of internship-related wage and hour violation lawsuits, a former intern is suing the Hearst Corporation, claiming that her unpaid internship violated the Department of Labor’s regulations.

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"Black Swan" Unpaid Interns Raising Legal Issues

Two former interns on the set of the movie “Black Swan” brought a class action lawsuit against Fox Searchlight Pictures, alleging that their work as unpaid interns crossed the line into work for which they should have been compensated.

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Ongoing DOL NY Restaurant Investigation Finding Repeated Violations

In a further example of industry-specific targeting for wage and hour violations, the Department of Labor issued a press release regarding a multi-year investigation of the full-service restaurant industry on Long Island, NY, finding multiple violations in numerous establishments.

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New Jersey Gas Stations Target of DOL Investigation

The federal Department of Labor recently recovered $1,014,895.00 in back wages for 295 gas station employees in New Jersey, according to a recent DOL News Release. 

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A BILL TO SEND MISCLASSIFYING EMPLOYERS THE BILL

While there has not been a specific law outlawing the misclassifications of employees as independent contractors, employers could be penalized for doing so by the IRS (since the proper withholding taxes would not have been paid), the Department of Labor (since overtime wages may not have been paid), or by Unemployment and Workers’ Compensation (seeking taxes and payments not previously made). A number of U.S. senators are looking to increase the consequences of misclassifications.

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Spreading the Pain: New York Hospitality Wage Order Makes All Restaurant and Year-Round Hotel Workers Eligible for Spread-of-Hours Pay

To state the obvious-- legal terms can be confusing. When mixed in with already confusing state wage and hour laws, employers can be left throwing up their hands in surrender. Take “spread of hours,” for example, which could mean practically anything-- though in practice, it mostly means headaches for well-intentioned employers.

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There's An App for That: DOL of iPhone/iPod/iPad App Helps Many Employees Track and Calculate What They're Owed

Everyone’s an app developer these days, it seems—your poker buddy, your niece in college, the poorly socialized guy in IT, and the would-be software tycoon down the street, for example. Uncle Sam’s gotten into the act, too: the Department of Labor just released a smartphone timesheet app.

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CATERING HALL FORCED TO PUT MINIMUM WAGE AND OVERTIME ON THE MENU

What some wit once said about gravity—it’s not just a good idea, it’s the law—also applies to the Fair Labor Standards Act (FLSA). The FLSA is not, as some employers seem to think, a set of suggested guidelines or best-practice recommendations. It’s the law. Violating it incurs liability—especially if a company violates the FLSA and a prior court order directing it to obey this very law. That’s exactly what a Long Island, New York restaurant and catering hall did, which is why the Westbury Manor now has to pay F$610,000.00 in back wages, interest, and penalties.

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IMPROPERLY RECOUPING WORKER'S OVERTIME PAY PUTS ANIMAL HOSPITAL IN THE DOGHOUSE

What do you call it when an employer forces workers to give their overtime wages back to the company?

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800,000 Reasons to Not Do What This Restaurant Did

The U.S. Department of Labor recently offered employers a legal cautionary tale of how not to pay employees when it hit a Long Island, New York restaurant with $800,000.00 in back wages and overtime pay liability, liquidated damages, and civil fines because

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Class Action Lawsuit Follows New DOL Interpretation of Mortgage Loan Officer Status

We blogged in January 2011 about a 2010 Department of Labor (DOL) interpretation concluding that mortgage loan officers were not exempt employees under the FLSA’s overtime pay regulations. The Mortgage Broker’s Association (MBA) had warned at that time that this interpretation reversing the DOL’s 2006 position finding that mortgage loan officers were exempt employees would cause the sky to fall on lenders.

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MBA Sues DOL Over Whether Mortgage Brokers Are Exempt from Overtime

On January 12th, 2011, the Mortgage Banker’s Association (MBA)—sued the Department of Labor (DOL) over the DOL’s March 24th, 2010 interpretation that mortgage loan officers are not exempt administrative staff.  This interpretation reversed a prior 2006 DOL opinion which had been relied on by the industry, that confirmed that loan officers were exempt administrative employees, ineligible for overtime pay. Under the March 2010 interpretation, loan officers would earn overtime wages—which means that mortgage lenders are potentially on the hook for millions of dollars of unpaid and future overtime wages.

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Independent Contractors or Employees? Make Up Your Mind

EnCana Oil & Gas company has been sued by six alleged “independent contractors”, for unpaid overtime as well as for benefits. The claimants assert that they were misclassified as independent contractors, when they should have been treated as employees.

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Do You Have to Pay People Who Work the Computer Help Desk Overtime Pay?

Since there is an overtime exemption for computer employees, computer help desk staff (a/k/a technical support or IT support) must be exempt from the overtime pay requirements, right?

Wrong. Tech support employees are not the right kind of computer employees that fit under that exemption. Remember: under the Fair Labor Standards Act, all employees earn overtime pay unless they qualify for a specific exemption. Overtime wages, even for technology workers, is the default.
 

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Overtime Compliance Must Be Taken Seriously - Damages Are Severe And Potentially Crippling For A Business

Some employers think that overtime compliance is optional and even a luxury, especially in a difficult economy. But think again. Failing to comply with the overtime laws could invite an audit by the state or federal department of labor, which in itself is an expensive and invasive process.  

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DOL Testimony Regarding The Employment Misclassification Prevention Act And Misclassification Enforcement Efforts

In Joel Greenwald’s blog on April 30th, he wrote about The Employee Misclassification Prevention Act (“EMPA”).  EMPA is making its way through Congress and was the subject of a hearing by the Senate Health, Education, Labor and Pensions (HELP) Committee on June 17th.  The Committee heard testimony from Seth Harris, Deputy Secretary of the US Department of Labor, as well as the New York State Department of Labor Commissioner Colleen C. Gardner and others. 

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Practice Over Policy - Overtime Wages Are Due For All Hours Worked Even If Workers Disregard Company Policies Or Instructions From Supervisors

Just because an employer or its supervisors tell employees not to work overtime or there is a written policy forbidding employees from working overtime, does not mean that overtime wages do not need to be paid to employees who work overtime hours. Workers who are not otherwise exempt under the overtime laws and who actually work more than 40 hours in a week must be paid overtime – even if they are instructed not to work overtime. 

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Employee Misclassification Prevention Act introduced in Congress: Are your employees being misclassified as Independent Contractors?

Given the estimated tens of thousands of employers that misclassify their employees as independent contractors, on April 22, 2010, an Ohio senator introduced The Employee Misclassification Prevention Act to provide workers with benefits they are not entitled to as independent contractors. Only those classified as employees are entitled to the protections of wage and hour laws, employment discrimination laws, and unemployment and workers’ compensation insurance. This federal legislation would amend the Fair Labor Standards Act and permit penalties for improperly labeling workers as contractors.

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Having Trouble Finding Recent DOL Opinion Letters?

If you’ve been having trouble finding recent U.S. DOL wage and hour opinion letters, you are not alone. In fact, the DOL has not issued an opinion letter regarding the FLSA since January 16, 2009 (when it also curiously withdrew 14 of them for “further consideration”).  What happened? The DOL determined that it is no longer going to be issuing wage and hour opinion letters.

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Don't Be Blindsided with an Overtime Audit Due to Misclassifying Independent Contractors

The IRS has stepped up enforcement of rules regarding independent contractors. Early this year, the IRS started deploying auditors to conduct intensive audits of an estimated 6,000 employers in different industries and including both large and small companies. The federal government believes that misclassification is on the rise given that independent contractors receive fewer incentives to trim costs during these difficult economic times. The IRS is engaging in vigorous enforcement for various reasons, including to collect more money for the federal tax coffers and as a result of the Obama administration’s friendly approach to labor.

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Don't Forget: States Have Penalties for Overtime Violations Too

Under the federal Fair Labor Standards Act (FLSA), if an employer violates the overtime provisions, employees may either bring their own lawsuit or file a complaint with the Department of Labor. In either case, the potential penalties against the employer are substantial and rectifying the original problem by paying back overtime wages owed to employees may not be the employer’s only concern.  Calculations of amounts due include the following:

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How much influence must someone have in the firing process to qualify as exempt from overtime under the executive exemption to the Fair Labor Standards Act rules?

Under the FLSA, employees are paid overtime unless they qualify for one of the exemptions in the Act. One of the most common exemptions is the Executive Exemption.  While called an “executive” exemption, it’s not limited only to inhabitants of the C-suites and their VP-level direct reports. Instead, it may be available to a wide range of managerial or supervisory employees and should likely be called the “managerial exemption.”

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Don't Round Time Worked and Deny Employees Overtime Pay

Non-exempt workers need to be paid for ALL time worked. Failing to do so can lead to substantial liability, especially for unpaid overtime pay. Amazon.com may be in the process of learning that lesson painfully.

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Paying Exempt Employees Who Serve Jury Duty

Employers are often unaware of the requirements under Federal law regarding paying exempt employees who serve jury duty. Failing to comply with these requirements can expose employees to significant risks. The main principle is simple enough: 

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Just Because an Employee is Exempt Doesn't Mean They Can't Be Paid Extra

Sometimes employees who are exempt from the overtime pay regulation need to work more hours, especially during busy seasons. Or perhaps you need more staff, but less than justifies hiring another person. Or perhaps you want to motivate exempt staff by offering them the opportunity to earn a commission or production bonus.

Can you pay an exempt employee more compensation for taking on extra responsibilities, working extra hours or shifts, or producing above-and-beyond the call?
 

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DOL Enforcement Effects on the Rise

The Department of Labor ("DOL") earlier this year announced that it would be hiring 250 additional investigators in an effort to pursue violators of minimum wage, overtime and meal break laws throughout the country. The news that the DOL is increasing their audits of employers that are not paying employees proper amounts of compensation is nothing new to both labor and employment lawyers as well as employers themselves.  It seems that new audits and fines are being reported on a daily basis.   

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Perils of Having Employees Work Through Lunch

It’s tempting to have employees work through lunch—there’s always more to be done, business doesn’t necessarily come to a stop at lunchtime, and anyway, management often works through lunch without additional compensation. So, why not other staff?

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Employees Are Exempt or Non-Exempt - Not Both

Since “exempt” employees are not covered by the overtime pay regulations, they do not have the possibility of collecting overtime wages to earn additional money. Many, however, would be happy to take on an extra job for their employer in exchange for more pay. With businesses reluctant to expand payrolls or fill vacant positions during this time of economic uncertainty, it would seem like a win-win situation: the company gets a job done by a proven employee who already knows the organization; the employee gets extra pay.

It is win-win…if it is handled correctly.

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Big Costs For Misclassifying Technical Support Workers

$27.5 million settlement with Siebel Systems. $65 million settlement with IBM. $24 million settlement with Computer Sciences Corporation. Allegations in a recently certified class action against Wells Fargo with up to 3,000 possible class members. These are significant numbers. They come out of settlements and claims against major companies for misclassification of technical support workers.

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Is that really an Intern?

Many industries make unpaid internships the gateway to an entry-level position. Unfortunately, as with many things in the employment law arena, what seems like a good idea may just be something that gets your company in trouble with the local Department of Labor. Internships are one of these problematic arrangements under the Fair Labor Standards Act (“FLSA”).

In order for people participating in an internship or trainee program to qualify as something other than the company’s employees who need to be paid, the program must satisfy ALL of the following criteria:

  1. The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;
  2. The training is for the benefit of the trainees or students, not the company;
  3. The trainees or students do not displace regular employees, but work under close supervision;
  4. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his or her operations may even be impeded;
  5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

A relatively safe way to set up an internship program is to partner with a local college or high school. If the student is getting school credit for the program, if the employer has to submit progress reports to the educational institution, and if there are sufficient educational components in the program (e.g., seminars and field trips, mentoring sessions with people in different departments, etc.), it is more likely that the program will pass muster . . . as long as all the above components are satisfied. 

Remember that an employer only needs to pay employees at minimum wage (currently $7.25/hour under the FLSA, which comes out to about $13,000.00/year), and to pay overtime wages if the employee works over 40 hours in one workweek (which the company can control). At that rate, it might be worth the investment to have paid “interns” and the associated ability to give them real work assignments that assist the company and its productivity, while providing peace of mind should the DOL come to call. Companies can still hire a paid intern for the summer, or a semester, and do not need to guarantee a job at the end of the internship period.  Doing this may well be preferable to putting the company at risk of incurring DOL penalties and fines—plus, the employer gets to see how the intern functions under real working conditions. 

Compensating Employees for Work-Related Travel To Remote Locations

Confusion often reigns when employers attempt to determine what their responsibilities are in terms of paying non-exempt employees for travel time.  When employees are on the road on behalf of the company, it can be very difficult to say what, exactly, constitutes “time worked.”  The Portal-to-Portal Act was enacted by Congress in 1947 specifically to carve out certain work-related activities for which employers would not be responsible for paying an employee. 

In general, employers are not required to pay employees for normal commuting time to and from work.  However, employers are often required to pay employees when they engage in work-related travel during the workday (i.e., travel that occurs after they begin work for their employer but before the workday ends).

A recent federal case, Kuebel v. Black & Decker [2009 WL 1401694 (W.D.N.Y.) squarely addressed the issue of compensable time for employees who travel to and from remote locations.  A retail specialist for Black & Decker whose work demanded that he travel to inspect Black & Decker displays at various Home Depot locations disputed Black & Decker’s policy of deducting one hour each way of “commuting time” from the travel time for which it compensated such workers (based on an Opinion the DOL had given Black & Decker on retail specialist travel time in 1999).

The specialist argued that his workday began not when he arrived at his first Home Depot of the day, but before he got on the road, when he began reviewing and responding to company e-mails, reviewing company sales reports and engaging in other company activities.  He further argued that his workday ended after he got home, when he finished checking the computer again for company business.

The court disagreed, noting that the homework Mr. Kuebel did for the company (for which he was compensated) could have been done at any hour of the day or night.  The fact that he chose to do the homework immediately before and after his road trips did not make his commuting time compensable.

This case falls squarely within the general rule that commuting time is not compensable. Even if employees start or end their workday at a remote location away from the employer’s main place of business, employers are generally not required to pay for the time the employee spent traveling from home to a remote location at the beginning of the workday or from a remote location back home at the end of the workday.  However, this general rule is not always so clear cut, as there are potential exceptions in which employers might be required to pay for at least some of this traveling time.