December 17, 2015
“Off-the-clock” work is a common violation of the FLSA which can lead to substantial monetary liability. "Off-the-clock" work occurs when a non-exempt employee performs work before clocking in, after clocking out, or during a break or other period of time when he or she has clocked out. This violation often occurs in circumstances where corporate management restricts overtime, yet local management and employees are unable to complete their duties within the normal 40-hour workweek. Thus, many of these lawsuits claim that the employer required or forced employees to work "off-the-clock." However, some investigations or suits involve alleged work activity that the employer did not know about or consider to be compensable "work."
The Wage and Hour Division of the U.S. Department of Labor has made investigating off-the-clock work claims a high priority, backed up by an increased number of investigators and additional resources to obtain compliance. Federal courts are experiencing a proliferation of cases seeking to hold employers liable for "off-theclock" work performed by employees. Because the amount owed to any single employee may be relatively small, these cases are often filed as “collective actions” in federal court, and as class actions in states where state wage and hour statutes exist. In these cases, the plaintiffs seek not only their hourly rate for the unpaid hours worked, but the additional hours actually worked "off-the-clock" often will push their total hours for week over 40 hours entitling them to be compensated at overtime rates for those hours. Prevailing plaintiffs always are entitled to recover attorney’s fees and costs.
An employer who violates the FLSA is typically liable for liquidated damages in an amount equal to the amount of unpaid overtime compensation. See 29 U.S.C. § 216(b). However, if the employer can prove that (1) the violation occurred in good faith and (2) it had "reasonable grounds for believing that its act or omission was not a violation of the [Act], the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title." 29 U.S.C. § 260. To meet the good faith prong, the employer must show that it had an "honest intention to ascertain and follow the dictates of the Act." Id .
The reasonableness prong "imposes an objective standard by which to judge the employer's behavior." Id. See Spires v. Ben Hill County, 980 F.2d 683, 689 (11th Cir. 1993).
The case of McGrath v. Central Masonry Corp., No. 06-224, 2009 WL 1992942 (D. Colo. July 8, 2009) illustrates the challenge of the good faith defense unless the employer has taken every precaution to educate supervisors and employees on rules prohibiting “off-the-clock” work. The court held that the employer was liable for liquidated damages because management was aware that the plaintiff was performing extra work without compensation, even though the plaintiff had not formally recorded the work on his time sheets and the employer claimed that it was not aware that the work constituted overtime. The court also rejected the employer's argument that it mistakenly thought that its policies complied with the FLSA, noting that the employer never consulted with a lawyer or other expert in personnel matters to ensure compliance. At a minimum, employers should issue a clear policy requiring employees to record and/or
report all time worked regardless of when and where the work occurred.