United States: Reducing Exposure To And Defeating Off-The-Clock OT Claims: A Ten-Step Plan

Off-the-clock work occurs any time someone performs work while not on their regular shift no matter where the work is performed. Generally, this work is compensable if the employer knows or should have known that the employee was performing the work. Off-the-clock claims can be challenging to defeat because they require employers to essentially prove a negative to win – that the employee did not actually work the time he or she claims, or if they did, that the employer did not know or should not have known that they were performing that work.

In this post, we offer employers ten steps they can take to reduce their exposure to these claims and/or defeat them if faced with one.

The Steps:

  1. Implement Clearly Worded Overtime and Timekeeping Policies. These policies should, among other things, clearly inform your overtime-eligible employees about their responsibility to record each hour worked, including with respect to meal and rest breaks. They should also clearly prohibit employees from working overtime unless they receive authorization from a supervisor. In particular, these policies should address timekeeping practices related to non-exempt employees' use of mobile or other electronic devices during non-working hours, an issue that can significantly increase the risk of overtime liability.
  2. Pay OT Even When those Policies are Violated. Your policies should also indicate that you will pay employees who notify you that they have performed unauthorized OT. The fact that an employee has violated your OT policy does not relieve you of your obligation to pay overtime.
  3. But Discipline When Policies are Violated. At the same time, even though you have to pay for unauthorized OT worked, you are still free to impose discipline for policy violations. And your policy shouldn't just threaten discipline for such violations; you should actually impose that discipline. Showing that you have a consistent track record of disciplining employees will deter future abuse and show a court that your policy is more than just words on paper. And the same goes for supervisors/managers: they should understand that if they require employees to work overtime, it must be reflected on the timesheets. If they prevent that from happening or otherwise alter timesheets, let them know that you can and will discipline them.
  4. Provide an Avenue for Complaints About Wages and Protect Against Retaliation. Extend your complaint and anti-retaliation policies and procedures to cover wage and hour issues. If employees are being forced to work off-the-clock, then this is a great way to learn about and rectify the problem. And of course, employees should be made to feel safe to report these issues without fear of retaliation. Later, employees will be hard-pressed to prove actual or constructive knowledge of their off-the-clock work if they did not take advantage of your complaint mechanism.
  5. Train Your Employees. Policies only go so far. Consider also training your employees about your OT and timekeeping requirements, including (i) how to obtain approval to work OT; (ii) how to prepare, review, and correct time records and report any issues, concerns or complaints about timesheets or off-the-clock work; (iii) on your commitment to non-retaliatory responses to an employee's use of your complaint mechanism; and (iv) the disciplinary consequences that will follow for violating these policies and procedures.
  6. But also Train Your Managers and Supervisors. Also consider training your managers and supervisors that they must (i) authorize any overtime; (ii) manage their employees' workloads properly and raise any workload concerns with their superiors; (iii) not require employees to work unauthorized overtime or improperly alter timesheets; (iv) report any instances in which employees work unauthorized overtime; and (v) not retaliate against employees who complain about not being paid for overtime. Remember: the problem is not always the employee; sometimes it's the supervisor/manager, especially where there is pressure to produce while keeping labor costs down. If your supervisors/managers know the rules, that you will enforce those rules, and that you'll discipline them if they break those rules, the chance of off-the-clock issues arising in the workplace is far less likely.
  7. Periodically Remind Your Workforce about OT and Timekeeping Policies and Procedures. It's one thing to require a new employee to read the policies in your handbook, but periodically reminding them of these policies, whether through a re-release of the handbook, or in a reminder email or otherwise, will help keep this issue top of mind and ensure compliance. A plaintiff will find it difficult to show he or she was unaware of obligations with respect to authorized OT and timekeeping if you regularly reminded your workforce of those obligations.
  8. Require Certification of Timesheets. Require both the supervisor and the employee to certify the accuracy of the employee's timesheet. And include language in the certification reminding employees of the obligation to report off-the-clock work. Further, the certification should instruct the employee not to sign the certification if the time recorded was not accurate. Lastly, hold on to the timesheets and other payroll records for a period of time consistent with Federal and state laws and regulations.
  9. Spot-Check. From time to time, reviewing timesheets and/or speaking with employees and their supervisors about how your timekeeping and overtime policies are working in practice can help you identify potential red flags. Consider walking through the office before and after hours to see if anyone is there, and check to see that employees are using their mandatory lunch breaks. Further, monitor afterhours e-mail to see if non-exempts are working. These spot-checking activities are especially important for non-exempt employees who may work out of the office in the field or at home.
  10. Study Employee Workloads. Similarly, consider whether certain non-exempt jobs are structured in a way that would allow a reasonable person to fulfill production requirements within a 40-hour workweek. And based on your findings, look at whether the amount of work being performed corresponds to expected OT usage rates. If your analysis determines that the production targets cannot reasonably be met while working a regular workweek or that employees are regularly exceeding targets that would make it more likely they are working off-the-clock, then you may need to revisit production requirements to eliminate any possibility that your employees are working overtime without proper authorization. If reducing production requirements is not a viable option, then consider whether adjusting your budget to account for increased overtime or adding headcount are feasible alternatives.

Why You Should Take Some or All of These Steps

We strongly encourage you to go through each step and consider its value to your organization. Some of these steps are easy enough to take, while others require more time, effort and resources. Whether you take each step or some combination thereof will depend on various factors, including your risk adversity; your resources; the size of your workforce; the types of non-exempt workers you employ and where they perform their services; your industry; your previous history addressing wage and hour disputes and so on.

We encourage you to consider these steps in the immediate near term given that the number of wage and hour class action claims continues to climb each year, and because the DOL will release its revised overtime rules this summer. When the DOL does that, it may leave you with no choice but to reclassify certain employees as non-exempt, in which case your overtime costs and exposure to off-the-clock claims may increase.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Michael S. Arnold
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.