A new federal district
court ruling underscores the importance of properly tracking and paying for all
overtime hours—even if you didn’t approve the overtime before it was worked.
Here’s a look at what happened, along with pointers on how to avoid similar disputes.
Policy Against Overtime
Scott Fletcher was an
instructor at Motorcycle Mechanics Institute in
Institute instructors were responsible for reporting their hours and were told
not to work overtime unless it was approved in advance.
Fletcher, a nonexempt,
hourly employee, was paid for 37.5 hours per week. He taught approximately 5
hours a day and then graded papers, planned and prepared course work, and met
with students for the remaining 21/2 hours in each workday.
Can’t Get the Work Done
At one point, Fletcher
embarked on a special project to develop a new grading system. He ended up
doing most of the work on the project at home, outside of his normal work
hours. Around the same time, Fletcher found he couldn’t complete his normal
planning and administrative work during his regular workday, so he wound up
putting in even more hours at home every week.
Fletcher told his
supervisors that he was working extra hours and that he couldn’t complete his
work during the regular workday. However, he never recorded the overtime on his
time sheets because, he alleged, overtime was a taboo subject at the Institute.
In fact, Fletcher claimed he was told that if he did work overtime, he
shouldn’t record it.
Employee Sues for
Overtime Pay
Eventually, Fletcher was
fired over performance and conduct issues. He turned around and sued the Institute
for back overtime pay under the federal Fair Labor Standards Act (FLSA). The
Institute said it wasn’t liable for the overtime because it had a policy
prohibiting employees from working overtime, it never approved Fletcher’s
overtime, and Fletcher never recorded overtime hours.
Employer Knew About
Overtime
But a federal district
court has now ruled that the Institute is liable under the FLSA.1 According to the court,
the Institute had actual or, at least, “constructive knowledge”—meaning that it
should have known— that Fletcher was working overtime, and its efforts to avoid
knowledge of the overtime work weren’t a shield to liability.
According to the court:
“[I]t appears that the [Institute] not only had an official policy against authorized
overtime, but they also had an unofficial policy of turning a blind eye to
overtime which the instructors seemingly needed to perform in order to accomplish
all the tasks associated with their jobs.” What’s more, there was evidence that
supervisors actively discouraged employees from reporting overtime hours. With
a minimal amount of effort, said the court, the Institute could have easily
discovered that instructors, like Fletcher, simply didn’t have enough hours in
the normal workday to complete their workloads.
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
4 Pointers
This case makes it clear
that having a policy against unauthorized overtime doesn’t immunize you against
having to pay for such overtime if you’re aware, or should have been aware,
that employees were working extra hours. This is true under both the FLSA and
law.
Here are four practical
pointers to help avoid similar problems:
6
1. Have an overtime
policy. Your
policy should make it clear that employees must get a supervisor’s advance
authorization to work overtime and that all overtime hours must be recorded on
timesheets.
2. Educate supervisors. Make sure supervisors know
they can’t refuse an overtime request and then simply turn a blind eye when an
employee works more than 8 hours in a day or 40 in a week. To avoid the need
for overtime work, it’s their responsibility to make sure workloads are properly
distributed and that each employee is being productive.
3. Take action. If an employee does work
unauthorized overtime, you must pay for the hours—but at the same time, you can
take disciplinary action against the employee to enforce your overtime policy.
It’s also important to take disciplinary action against a supervisor who flouts
the rules by discouraging employees from recording overtime.
4. Keep detailed
records. Keep
complete records of all hours your employees work—including all time they put
in on tasks before or after their workday. Not only is recordkeeping required
by law, but it will make it easier for you to show your employees were correctly
paid if you’re challenged.
_
1 Fletcher v. Universal
Technical Institute, Inc., U.S.D.C. (M.D. Fla.) No. 05-585, 2006