A recent decision by a federal district court in New York highlights the importance of polices when it comes to FLSA/overtime issues. Under the FLSA, an employee must be compensated for all time he or she is "suffered or permitted to work."
In Joza v. WW JFK LLC, a hotel reservation agent claimed that Ramada did not compensate her for overtime she worked but purposely did not record on her time sheets. The plaintiff based her claim on the theory of constructive knowledge. Under this theory, an employer is accountable for overtime hours it reasonably should have known the employee had worked, even if the hours were not recorded on a timesheet. The plaintiff argued that "since some of the individual defendant supervisors were sometimes in the vicinity of her workspace while she was eating at her desk, or when she was present at her desk after her scheduled shift ended, that they must have realized that she was not only there but working on hotel business and doing so on overtime."
Ramada, however, defended by stating "corporate policy is for managers to review each employee's weekly time clock report and, should the time clock establish that an employee who was on the hotel premises in excess of that employee's scheduled hours, the manager was then obligated to make specific inquiry of the employee to ascertain whether the employee had worked overtime without submitting the required overtime form."
The court sided with Ramada because Ramada proved that the managers "followed company policy and protocol designed not to frustrate legitimate overtime claims, but to ensure that, by the reconcilement of payroll and time clock records, each employee was compensated at the appropriate overtime rate for any work actually performed on an overtime basis."
The court found that the "defendants had no knowledge of Joza's alleged extra overtime work."
In light of the plethora of FLSA claims, employers should:
- adopt, maintain, monitor, and enforce written policies requiring supervisor approval of overtime requests and overtime hours worked by non-exempt employees;
- educate supervisors not to ask non-exempt employees to perform any work, such as answering a question or a phone call, or responding to an email or a text, during a meal period, otherwise the non-exempt employee is to be paid for the entire meal period or be given another 30 minute, uninterrupted meal period.
- forbid supervisors from discouraging non-exempt employees from recording hours worked on their time sheets. In other words, forbid "off the clock" work;
- prepare forms to be completed by non-exempt employees, and signed off on by a supervisor, that specifies the date of, number of hours spent on, and the reason for, any overtime work;
- pay non-exempt employees for all overtime hours;
- educate supervisors to question non-exempt employees found at their work station before or after their scheduled shift, or during meal breaks, whether they are performing work for the benefit of the employer; and
- compare payroll and time clock records to ensure that non-exempt employees are compensated for all overtime hours actually worked.