"But I Didn’t Know You Were Working…"

03 November 2014 Labor & Employment Law Perspectives Blog

We live in the era of wage and hour lawsuits, particularly involving claims of “off the clock” work. Employees – who rarely first complain to their employer – allege in the lawsuit they were required to work “off the clock” because the employer only allowed reporting a certain number of hours, because the employer “discouraged” overtime, or because of the need “to get the job done.” The employer first hears of these “off the clock” hours when the federal or state lawsuit is filed and damages claimed.

The employer is often blindsided by this alleged “off the clock” activity and does not understand why the claim was filed. The usual response – “I didn’t know the employee was working these hours” – is then normally followed by “why didn’t he tell me?”

This response is understandable, but usually not successful in defending a wage-hour claim. Particularly under the Fair Labor Standards Act, an employer is liable for “suffering or permitting” an employee to work. Knowledge of the hours worked is sometimes reduced to “constructive knowledge,” the idea that the employer knew or should have known the employee was working above and beyond reported hours. Is there anything an employer can do to try and insulate against arguments that it should have known employees were working off the clock? The answer is “Yes,” and employers can do some or all of the following:

1. Review existing policies to ensure that employees are clearly informed to report all hours worked. Reiterate that all work will be paid. Make sure the policy is easily and repeatedly communicated to the employee, not stuck in a 3-inch binder full of policies.

2. Assess whether there are activities required of employees that might be likely to occur outside of the assigned regular work hours. Does the employee check or respond to email outside the assigned schedule, or does the employee have remote access to employer systems such as email such that the employee could do work activities from locations other than the employee’s normal worksite and outside of normal work hours? Is the employee required to take phone calls, answer questions or do other “work” during regular breaks or lunch periods? Can the work assigned to the employee be reasonably accomplished within the assigned schedule? Is there anything the employee is required to do prior to actually beginning work and “clocking in?” An employer may liable for compensating the employee if any of these activities occur.

3. Evaluate the time-keeping system to ensure that it accurately captures and tracks an employee’s work hours. Does the system allow for adjustment if the employee’s time is not captured? What type of verification must the employee give of the hours reported? All of this will allow the employer to prove that the system accurately recorded the employee’s hours and the employee agreed with the hours reported and for which they were paid.

4. Ask whether it makes sense to have all employees record their work hours. While such timekeeping is not required of exempt employees, and will not be used to calculate pay, the information may later be useful if the employee alleges to be misclassified and should have been treated as a non-exempt employee. Absent this reporting, the employer will have little or no way to contest the claimed hours worked.

The era of wage and hour lawsuits is likely to continue. “Wage theft” will remain a rallying cry both politically and legally. By using the steps above employers can put themselves in a better position to defend the claims and not be found to have “kept their head in the sand.” Both in life and in the law, the ostrich defense rarely works.

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