Employers face significant risks if they don’t track the number of hours worked by their employees, even employees paid on a salary basis.
If you can’t prove when the clock got punched, you are the one that will take a hit.
Why Track a Salaried Employee’s Hours?
We saw this play out recently for Linda Wagner, an Administrative Specialist for Lee County, Florida. Wagner was paid a salary for performing routine secretarial and administrative work, and she was not paid for any overtime hours.
Among a number of other claims, Wagner sued the County under the Fair Labor Standards Act (FLSA) asserting that she was owed overtime for a large number of extra hours she worked beyond 40 in various workweeks. The employer disagreed, claiming that she never worked any extra hours. Wagner lost in the lower court and then appealed to the Eleventh Circuit Court of Appeals.
In order to establish entitlement to unpaid overtime, the employee carries the burden of showing that (1) they worked extra hours for which they were not compensated, and (2) that the employer knew, or should have known, about the overtime work. If there are no time records kept, the employee need only come forward with “sufficient evidence to show the amount and extent of [the unpaid] work as a matter of just and reasonable inference.”
In other words, the employee’s burden is easier to carry because they only have to approximate the hours they actually worked and then bring in some sort of evidence that they actually worked those hours.
Oh, That’s Why
In this instance, Wagner proved that her supervisors and various other employees were all aware that she worked additional hours, often staying late to take notes at meetings or working at home to write up those notes for her supervisors.
Therefore, the burden shifted to the County to disprove the actual hours worked or otherwise negate the inference drawn from Wagner’s evidence. This was an impossible task since the County did not actually keep time records reflecting the hours that Wagner worked. With no documentation to rebut the recollections of Wagner and all of her witnesses, the Eleventh Circuit ruled against the County and found that Wagner had sufficiently established her legal entitlement to overtime pay.
The case therefore was remanded back to the lower court to determine if Wagner might qualify for an exemption (not likely since routine clerical tasks typically do not qualify for administrative exemption). If not, the County will be liable for unpaid overtime pay plus additional damages and potentially attorney’s fees.
Employers should always document the hours worked by all employees, both salaried and hourly. Even if the employee is considered exempt, the employer should maintain time sheets or some other form of record reflecting the number of hours worked in a week.
Otherwise, there will be no way to offset an employee’s undoubtedly generous estimate of the number of additional hours they worked when they bring a claim for unpaid overtime because of misclassification, failure to observe the salary-basis rules or simply failure to pay what is owed.