Fair Labor Standards Act Recordkeeping Regulations

Friday, September 17, 2010

Issues with what records to keep and for what duration are common concerns with the Fair Labor Standards Act and often problematic when employers attempt to defend their actions on why a job is classified as exempt. non-exempt or whether time was paid time or not paid. Even for those organizations with formal policies covering hours of work, such policies must be carried routinely out by line supervisors and managers.

As recently as June 7, 2010, the Kentucky State Auditor, reported that the Barren County’s Library Board failed to maintain adequate time records under both Kentucky state law and Fair Labor Standards Act’s recordkeeping regulations, 29 CFR Part 516. The Act requires employers to maintain a list of basic records, including: time and day of week when employee’s workweek begins; hours worked each day; and total hours worked each workweek. While such recordkeeping seems fundamental to the operations of almost any business, failure to do so can be a time consuming and costly endeavor.

While it appears to be a simple task to track employee days of work, work times, hours, and pay rates; consider an organization that has several locations, operating at different times, may be with split shifts, and on different days. Now consider that such as organization lacks computerized or electronic means of tracking start/stop times, hours, and days worked. Under such a condition it would be easy for both the employer and employees to be unable to know, with certainty, what hours were worked and when.

 The City of Fort Wayne, Indiana, employed a gardener at the Lawton Park greenhouse. Part of the gardener’s responsibilities at the greenhouse involved spraying pesticides containing toxic chemicals, some of which required quarantine. Accordingly, for a period the gardener was required to clock-out of work several hours early and then return in the evening to perform spraying after other employees had left. The City's obvious motivation for utilizing this system was to limit exposure to dangerous chemicals by completing pesticide spraying after hours, but at the same time avoid paying overtime to the gardener. In such an arrangement, failure to track starting and stopping times, hours worked during each portion of the split shifts, the total hours worked could lead to significant legal action, and it did when the gardener eventually filed for overtime.

Often at issue when employers fail to keep time, hours, pay, and other labor records is who to rely upon for those records. It is not out of the question for the courts to turn to employee dairies, journals, employee testimony, and other non-employer records for determining the hours worked and when.

How expensive can it be to pay for a few “off the clock” hours and work not handled correctly in the first place?.

It has been reported that Walt Disney Parks and Resorts U.S. in Orlando, Fl paid $433,819 in back wages to employees after a DOL WHD investigation found that workers were not paid for work before and after their shifts and while working from home. Although Walt Disney had rules associated with off-clock work, the report concluded that company managers failed to adhere to company policies.  The DOL’s WHD also recovered $868,443 in wages for employees of Central Florida Investments, a company that operates timeshare resorts in Florida.

Are these isolated events where a few supervisors or managers ignored their company’s rules? Hardly, according to the DOL’s WHD news releases, several millions of dollars in unpaid hours and overtime have been recovered in 2010 alone. While no employer wants to be faced with the payment of unplanned expenses, employers certainly do not want the loss of community goodwill, increased recruitment difficulties, and months, if not years of litigation.