Wage & Hour Counsel : Wage & Hour Lawyer & Attorney : Littler Mendelson Law Firm : Employment Law, Labor Relations

Effective July 1, 2010, Tennessee has amended its wage payment statute, Tennessee Code section 50-2-103, to allow employers to pay their employees using prepaid debit cards if the following conditions are met:

• The employee has the ability to make at least one withdrawal or transfer each pay period without cost to the employee for any amount contained on the card; and
• The employer provides the employee with a full written disclosure of any fees that may apply.

Employees must be provided the option of being paid via direct deposit or prepaid debit card. If an employee elects to be paid by direct deposit but does not designate an account at a financial institution in a timely fashion for the transfer to occur, the employer may arrange to pay the employee via prepaid debit card.

This entry was written by Andrew Voss.

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Kellogg Company (Kellogg) was granted summary judgment and dismissal of claims raised by a manufacturing employee in its Rossville, Tennessee manufacturing plant. In Franklin v. Kellogg Company, C.A. No. 08-2268 (W.D.Tenn.), the district court held that time spent by manufacturing employees changing into and out of company-issued gear was noncompensable under Section 3(o) of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. This is because Section 3(o) excludes time spent by employees donning and doffing “clothes” from compensable hours worked where such time is either explicitly addressed in a collective bargaining agreement, or by custom or practice established under a collective bargaining agreement.

Plaintiff Alice Franklin claimed that she was entitled to compensation for time spent changing into and out of company uniforms and other gear both prior to and after her work shifts. She sought to represent Kellogg employees on a nationwide basis. Ms. Franklin’s motion to certify a collective action under the FLSA, however, was rendered moot by the court’s finding in favor of Kellogg. As an initial matter, the court found that the company uniform and standard equipment used by the plaintiff constituted “clothes” under Section 3(o). The uniforms in question consisted of pants, snap front shirts and slip-resistant shoes and the standard equipment included hair nets, beard nets, safety glasses, ear plugs and bump caps. The court relied on its prior decision in Sisk v. Sara Lee Corp., 590 F. Supp. 2d 1001 (W.D.Tenn. 2008), holding that protective gear worn by meat processing employees fell under the definition of clothes under Section 3(o). It found that plaintiffs failed to present any compelling reason to reconsider that holding.

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