By now, I suspect our faithful readers here know you need to record all the hours worked by your employees, and pay them accordingly. But in fact, it’s a little more complicated than that.

The Fair Labor Standards Act (FLSA) requires employers to pay workers for all the time they’re “suffered or permitted” to work. That means, it’s not just the hours for which you’ve scheduled them to work, or even necessarily the time that appears on their time sheet. Courts have consistently ruled if an employee is working and the employer knew — or should have known — about it, the time must be paid… even if the employee doesn’t officially report it.

Case #1

Michael Caggiano used to work for the Illinois Department of Corrections (IDOC). According to Michael, he often ate his lunch while remaining on duty in the dayroom, supervising inmates because his shift was understaffed and there was no one to relieve him.

Note that the FLSA requires that for a lunch break to qualify as unpaid, employees must be completely relieved of duty. Staying in the dayroom keeping an eye on inmates probably doesn’t count as “completely relieved of duty.”

For some reason, though, Michael didn’t report the times when he worked through lunch.

Michael took time off in 2011 and 2012 to care for his ailing mother. He wanted the leave to be counted under the terms of the Family Medical Leave Act (FMLA). The thing is, in order to be eligible for FMLA leave, an employee has to work at least 1,250 hours per year. Because of Michael’s 7.5-hours-per-day schedule, the IDOC said he hadn’t worked enough hours to be eligible and fired him for excessive absences.

In what will likely come as a surprise to no one, Michael sued the IDOC.

The IDOC filed a motion for summary judgment, meaning they wanted the judge to throw out the case without having to go to trial. They claimed Michael’s supervisors were unaware he was working through lunch because he didn’t report it, so they shouldn’t have to pay for his time, or count it toward his eligibility for FMLA leave.

The judge in the case denied their motion, saying, “If the plaintiff’s claims are true, it’s hard to believe that management really had no idea that he was working through lunch on a regular basis. And if they knew, they either should have stopped it or made sure he was paid. Unfortunately, a lot of managers are under the incorrect impression that if an employee isn’t reporting the extra work time and they didn’t authorize it, they don’t have to worry about paying overtime. That’s just not the case…”

So now the IDOC is facing the hassle and expense of a jury trial. In that trial, they’ll have to defend the understaffing of Michael’s shift and supervisors turning a blind eye toward him working through lunch most days, and justify appearing to be mean to a guy who was just trying to take care of his sick mom. (Which doesn’t portray them in a very sympathetic light for the jury.) They may just decide it will be easier and cheaper to settle before the case goes to trial.

Case #2

Sometimes, it’s not the managers, but the employees, who need training on the provisions of the FLSA.

Sharon Smiley used to work as a receptionist for Equity Lifestyle Properties, Inc. in Chicago.

One day, a manager asked her to do some extra work. For some reason, she decided to complete the project at her desk, while she was on her lunch break.

The problem: the company had a long-standing policy (documented in the employee handbook for at least 10 years) that non-exempt employees were required to take a 30-minute lunch break. Which, as we know from the case above, means they can’t be working during that break time. According to the company, employees not taking the break was not just against company policy but also a violation of Illinois labor law.

After a discussion with HR, Sharon found herself out of a job. She was quoted by a local ABC News reporter as saying, “I was under the impression that because I punched out I could do what I want.”

Well, only to an extent. If you’re an overtime-eligible employee, the one thing you can’t do when you’re clocked out is work. Some employees might think that working “on their own time” shows their dedication and company loyalty. To avoid getting your business in trouble, it’s important to make sure all overtime-eligible employees understand that off-the-clock work is against the rules.

Eventually, after a lawsuit and appeals and several years of hassle and expense by both the company and the employee, the courts ruled that the company was within their rights to terminate her employment in the first place, but Sharon was still eligible for unemployment.

Training is the key

There have been tons of lawsuits over the years — especially involving hospitals and other facilities where somebody needs to be “on call” at all times — where employees have claimed they had to work through their lunch breaks and either weren’t paid, or the time wasn’t counted toward overtime. In some cases, the problem was that the employees weren’t reporting their time. But as we’ve seen, if the courts think management should have been aware of what was going on, “But they didn’t tell us!” might not work as a solid defense.

At times, the company’s time and attendance system is set up to take an automatic lunch break without employees being required to clock out. On the surface this might seem convenient, but you have to make sure your employees have a quick and simple way to report when they’ve worked through lunch, so you can reverse the automatic deduction.

To avoid trouble with off-the-clock work, we recommend three basic steps:

  • Establish a written company policy that prohibits off-the-clock work. Make sure all employees are aware of this policy. Remind them from time to time, just to make sure.
  • Train your supervisors and managers, not simply to refrain from demanding, asking, or even hinting that employees work off-the-clock, but to keep their eyes open for situations where an employee might be working off-the-clock without reporting it.
  • Train your overtime-eligible employees that working off-the-clock is not permitted. Let them know that it isn’t going to win them “brownie points”… in fact, it might lead to disciplinary action. If they work off-the-clock, even with the best of intentions, they open your company up to potential legal liability.

Acroprint can help, too

To make sure your employees record all their work time, you also need an accurate and convenient time recording system. It needs to be fast, so your employees can get clocked in and out with minimal hassle. It needs to give you the tools you need to effectively manage your workforce.

Take a look at AcroTime Workforce Management and schedule a demo to get a personalized walk-through of the system.

For business owners, managers, and supervisors, AcroTime offers all the reports and controls you could want. Choose from modules to help you manage time and attendance, payroll, scheduling and human resources administration — all with a single sign-on and a single employee record to keep all your workforce data in sync.

Your employees can breeze through clocking in and out, no matter where they’re working — in the office, at home, on the road. They can record their time over the web, using a badge or biometric terminal, with our free smartphone app, even over a standard land-line telephone.

No more excuses for employees working off-the-clock!

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