- Reducing Exposure to and Defeating Off-the-Clock OT Claims: A Ten-Step Plan
- February 24, 2016
- Law Firm: Mintz Levin Cohn Ferris Glovsky Popeo P.C. - Boston Office
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.