Monday, May 23, 2016

When must employees be paid for off-the-clock overtime?

Just about a year ago, in Moran v. Al Basit LLC, the 6th Circuit seemed to hold that all an employee needs is his or her own testimony to establish an entitlement to unpaid compensation under the FLSA. At the time, I expressed concern that such a holding might lead to more jury trials in off-the-clock wage/hour cases:
This ruling is scary, and has the potential to work extortionate results on employers. If all an employee has to do to establish a jury claim in an off-the-clock case is say, “The employer’s records are wrong; I worked these approximate hours on a weekly basis,” then it will be impossible for an employer to win summary judgment in any off-the-clock case.
Last week, in Craig v. Bridges Bros. Trucking [pdf], the same court offered some clarity on, and maybe some relief to, employers on this issue.
Craig argues that her “timesheets [sic] alone establish, as a matter of law, that she is entitled to overtime wages.” … Craig conflates the issues. In an FLSA motion for summary judgment, a plaintiff must prove both “that he or she performed work for which he or she was not properly compensated,” … and that the employer had actual or constructive knowledge of that overtime.… 
No one disputes that Craig worked overtime or that she was not compensated at the statutory rate. As such, this case turns entirely on whether Bridges Brothers “knew or had reason to believe” that Craig was working overtime. Whether a party had the requisite knowledge is a question of fact.… It requires “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences,” all of which “are jury functions, not those of a judge.” While a jury could conclude that an employer exercising reasonable diligence should know what is on its own time sheets and payroll records, we cannot say as a matter of law that a jury could not conclude otherwise here. 
Off-the-clock pay issues are tricky for employers. The standard—an employee must be paid if the employer knows or should have known that the employee was working—is simple in explanation but difficult in execution. When should an employer know that an employee is working? Craig establishes that an employee needs something more than one's own word for it on a timesheet.