Off-the-clock work occurs any time someone performs work while not on their
regular shift no matter where the work is performed. Generally, this work
is compensable if the employer knows or should have known that the employee was
performing the work.
Off-the-clock claims can be challenging to defeat
because they require employers to essentially prove a negative to win – that
the employee did not actually work the time he or she claims, or if they did,
that the employer did not know or should not have known that they were
performing that work.
In this post, we offer #employers ten steps they can take to reduce their
exposure to these claims and/or defeat them if faced with one.
The
Steps:
1.
Implement Clearly Worded Overtime and Timekeeping
Policies. These policies should, among other things, clearly
inform your overtime-eligible employees about their responsibility to record
each hour worked, including with respect to meal and rest breaks. They
should also clearly prohibit employees from working overtime unless they
receive authorization from a supervisor. In particular, these policies
should address timekeeping practices related to non-exempt employees’ use of
mobile or other electronic devices during non-working hours, an issue that can
significantly increase the risk of overtime liability.
2.
Pay OT Even When those Policies are Violated. Your policies should also indicate that you will pay employees who notify
you that they have performed unauthorized OT. The fact that an employee
has violated your OT policy does not relieve you of your obligation to pay
overtime.
3.
But Discipline When Policies are Violated. At the same time, even though you have to pay for unauthorized OT worked,
you are still free to impose discipline for policy violations. And your
policy shouldn’t just threaten discipline for such violations; you should
actually impose that discipline. Showing that you have a consistent track
record of disciplining employees will deter future abuse and show a court that
your policy is more than just words on paper. And the same goes for
supervisors/managers: they should understand that if they require employees to
work overtime, it must be reflected on the timesheets. If they prevent
that from happening or otherwise alter timesheets, let them know that you can
and will discipline them.
4.
Provide an Avenue for Complaints About Wages and
Protect Against Retaliation. Extend your complaint and anti-retaliation policies
and procedures to cover wage and hour issues. If employees are being
forced to work off-the-clock, then this is a great way to learn about and
rectify the problem. And of course, employees should be made to feel safe
to report these issues without fear of retaliation. Later, employees will
be hard-pressed to prove actual or constructive knowledge of their
off-the-clock work if they did not take advantage of your complaint mechanism.
5.
Train Your Employees. Policies only
go so far. Consider also training your employees about your OT and
timekeeping requirements, including (i) how to obtain approval to work OT; (ii)
how to prepare, review, and correct time records and report any issues,
concerns or complaints about timesheets or off-the-clock work; (iii) on your
commitment to non-retaliatory responses to an employee’s use of your complaint
mechanism; and (iv) the disciplinary consequences that will follow for
violating these policies and procedures.
6.
But also Train Your Managers and Supervisors. Also consider training your managers and supervisors that they must
(i) authorize any overtime; (ii) manage their employees’ workloads
properly and raise any workload concerns with their superiors; (iii) not
require employees to work unauthorized overtime or improperly alter timesheets;
(iv) report any instances in which employees work unauthorized overtime;
and (v) not retaliate against employees who complain about not being paid for
overtime. Remember: the problem is not always the employee; sometimes
it’s the supervisor/manager, especially where there is pressure to produce
while keeping labor costs down. If your supervisors/managers know the
rules, that you will enforce those rules, and that you’ll discipline them if
they break those rules, the chance of off-the-clock issues arising in the
workplace is far less likely.
7.
Periodically Remind Your Workforce about OT and
Timekeeping Policies and Procedures. It’s one thing
to require a new employee to read the policies in your handbook, but
periodically reminding them of these policies, whether through a re-release of
the handbook, or in a reminder email or otherwise, will help keep this issue
top of mind and ensure compliance. A plaintiff will find it difficult to
show he or she was unaware of obligations with respect to authorized OT and
timekeeping if you regularly reminded your workforce of those obligations.
8.
Require Certification of Timesheets. Require both the supervisor and the employee to certify the accuracy of the
employee’s timesheet. And include language in the certification reminding
employees of the obligation to report off-the-clock work. Further, the
certification should instruct the employee not to sign the certification if the
time recorded was not accurate. Lastly, hold on to the timesheets and
other payroll records for a period of time consistent with Federal and state
laws and regulations.
9.
Spot-Check. From time to
time, reviewing timesheets and/or speaking with employees and their supervisors
about how your timekeeping and overtime policies are working in practice can
help you identify potential red flags. Consider walking through the
office before and after hours to see if anyone is there, and check to see that
employees are using their mandatory lunch breaks. Further, monitor
afterhours e-mail to see if non-exempts are working. These spot-checking
activities are especially important for non-exempt employees who may work out
of the office in the field or at home.
10. Study Employee Workloads. Similarly, consider whether
certain non-exempt jobs are structured in a way that would allow a reasonable
person to fulfill production requirements within a 40-hour workweek. And
based on your findings, look at whether the amount of work being performed corresponds
to expected OT usage rates. If your analysis determines that the
production targets cannot reasonably be met while working a regular workweek or
that employees are regularly exceeding targets that would make it more likely
they are working off-the-clock, then you may need to revisit production
requirements to eliminate any possibility that your employees are working
overtime without proper authorization. If reducing production
requirements is not a viable option, then consider whether adjusting your budget
to account for increased overtime or adding headcount are feasible
alternatives.
Why You Should Take Some or All of These Steps
We strongly encourage you to go through each step and consider its value to
your organization. Some of these steps are easy enough to take, while
others require more time, effort and resources. Whether you take each
step or some combination thereof will depend on various factors, including your
risk adversity; your resources; the size of your workforce; the types of non-exempt
workers you employ and where they perform their services; your industry; your
previous history addressing wage and hour disputes and so on.
We encourage you to consider these steps in the immediate near term given
that the number of wage and hour class action claims continues to climb each
year, and because the DOL will release its revised overtime rules this
summer. When the DOL does that, it may leave you with no choice but to
reclassify certain employees as non-exempt, in which case your overtime costs
and exposure to off-the-clock claims may increase.
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