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A student loan servicing company with offices in the Denver metro area should have paid its call center representatives for the time spent logging in to their work stations at the beginning of each shift, the federal appeals court based in Colorado has ruled. The decision affects close to 350 employees owed a total of $31,585.

Previously, a lower court judge in Colorado sided with Nelnet Diversified Solutions, finding that the one-to-two minutes call center employees spent each day navigating to the timekeeping system was so small as to not merit compensation. But on Friday, a three-judge panel for the U.S. Court of Appeals for the 10th Circuit reversed that decision for failing to appreciate the financial impact for each worker.

"We are unprepared to dismiss individual claims of approximately $125 per year — particularly for 'low wage workers' who earn $13.50 an hour — as insignificant," wrote Judge Nancy L. Moritz in the Oct. 8 opinion.

Nelnet's headquarters are in Lincoln, Neb. In 2017, an ex-employee filed a lawsuit alleging the company violated the Fair Labor Standards Act by failing to properly account for and compensate call center representatives' hours worked.

According to the class action lawsuit, Nelnet paid their call center representatives once they clocked in to the timekeeping system at their workstations. However, before they could clock in, the workers needed to boot up their computer, scan a security badge, enter credentials and launch a software program called Citrix. 

An expert for Nelnet estimated the average time it took call center employees between badging in and opening Citrix, then the time required to clock in afterward. Altogether, it took workers an average of 1.6 minutes in the student loan collector's Omaha office, 2.2 minutes in the Lincoln office and 2.27 minutes at the Aurora location. The class action lawsuit covered those three sites for a window between 2014 and 2018.

The plaintiffs disputed the expert's calculation. They submitted a statement from one former Aurora employee, Matthew Andrychuk, who said he encountered slow loading times on his computer and arrived early to work in anticipation of a 15-minute startup process. "I was not paid for the time I spent booting up the computer and programs, which was about one hour and fifteen minutes or longer each week, depending on computer and program loading technical issues," he said.

In August 2019, U.S. Magistrate Judge Nina Y. Wang sided with Nelnet. By doing so, she agreed with the plaintiffs that setting up the computer and signing in to take calls were integral parts of call center representatives' employment, and that this happened regularly in their jobs. But Wang ultimately concluded it would be an administrative burden for Nelnet to keep track of this beginning-of-shift time, and that the amount owed for pre-shift activities based on the expert's estimate was minimal.

"The court does not have sufficient information before it to determine precisely the average lost wages per work day," she wrote, "but there is no evidence in the record to suggest that the figure amounts to more than cents, rather than dollars, per day."

Call center representatives earned between $13.50 and $15 per hour. A magistrate judge, per the U.S. District Court for Colorado, makes approximately $200,000 per year.

The Fair Labor Standards Act requires employers to pay for their employees' work, including tasks that are integral to a worker's "principal activities" — like setting up a computer to take calls in a call center.

Although Nelnet tried to argue that their call center representatives were simply doing the equivalent of standing in line to punch a time clock, the 10th Circuit noted other court cases that deemed changing into and out of work clothing at a factory, sharpening knives at a meatpacking plant, and checking out keys at a prison as integral to principal work activities. Logging in to a computer for a computer-centric job was no different, the panel determined.

Moreover, Nelnet had not adequately argued why it could not keep track of this time and compensate call center representatives for it, given that, as Moritz noted, it "involves the same set of tasks performed by every CCR at the start of every shift."

The 10th Circuit disagreed with Wang's characterization of the uncompensated time as too minimal to justify a judgment in the employees' favor. By her calculation, each member of the class action lawsuit would receive $84 over the entire period covered by the litigation. But the panel agreed with the plaintiffs that forfeited wages of that amount were not trivial. In addition, it found Wang's numbers underestimated what a given employee may be entitled to, given the varying lengths of employment and full-time versus part-time status of class members.

"Indeed, for a CCR who worked for Nelnet for one full year of the collective-action period, the aggregate claim would be approximately $125. And rounding the collective-action period up to four years," Moritz explained, "a CCR who worked for Nelnet for the entire period would have an aggregate claim of approximately $500."

The appellate panel reversed Wang's decision in favor of the company. Nelnet previously reported spending $185,546.69 to defend itself against the lawsuit — in which employees were eligible for $31,585 at most.

The case is Peterson v. Nelnet Diversified Solutions, LLC. 

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