Authored by Alex Passantino
Smartphone apps. They’re everywhere. It seems as though everyone has an app. Even the U.S. Department of Labor. DOL has an app that lets you check the compliance status before you decide whether to eat at Café du Misclassificacion (read more here). It has an app that tells you how hot it feels outside. And, it has an app that allows employees to record the time they spend working for you.
This last app — cleverly named “DOL-Timesheet” — is of particular note to those of us in the wage and hour world. It allows employees to create a timesheet, enter a rate of pay, and record — either contemporaneously (with a clock-in/clock-out function) or after the fact (with a manual function) — the time spent working for you. The Wage and Hour Division has been touting the app for quite some time now, and, in a recent press release, explains the app’s significance: “instead of relying on their employers’ records, workers now can keep their own records.” Think about that . . . the DOL has developed a tool for employees to create a shadow set of timekeeping “records” to be used to challenge your timekeeping records. If that doesn’t concern you, then understand that the app has few safeguards on data quality — for example, an employee can create a timesheet with, say, 42 hours worked on a single day, a feat that seems difficult for even the most efficient worker.
So, Did WHD Use Information from the App? Did Someone Work Actually Work 42 Hours a Day?
Actually, it’s not clear that the employer in WHD’s enforcement action was impacted by an employee’s use of the app. According to WHD, the employer paid overtime after 45 hours in a week and “failed to pay employees for time spent transporting equipment from the last job site of the day back to the company’s headquarters.” The FLSA requires that non-exempt, covered employees be paid an overtime premium for hours worked in excess of 40 hours in a workweek. It also requires that employers pay at least minimum wage for all hours worked. As described in the WHD press release, the time spent by an employee transporting equipment from the last job site back to headquarters is probably working time for which the employee should be paid. Of course, there are numerous other situations in which it may not be readily apparent that an employee should have been paid. And still more in which you might think, “Of course that’s [or . . . not] compensable time!” In either case, you should be consciously considering the legal ramifications before deciding to exclude time from work hours.
Well . . . What Should We Do?
First and foremost, if your answer to the question “After how many hours do you pay your non-exempt employees overtime?” is a number higher than 40, then you’re probably going to want to take a good, long look at your compensation plan.
Second, you should evaluate your own timekeeping and payroll practices. Are employees working time that isn’t captured by the timekeeping system? Is there travel time during the course of a work day that isn’t being included in the employees’ hours worked? Do your managers simply write down “8” for each employee and hope for the best? Take care now to ensure that you are properly including (or excluding) certain periods of time from “hours of work,” and — this is important — that the time is being properly and accurately recorded.
Finally, consider whether you have appropriate safeguards in place to combat against an employee’s future claim that he or she was not paid for all hours worked. Are your timekeeping policies clear? Must employees acknowledge/certify that their time is accurate? Do you conduct periodic reviews of actual practices to determine compliance?
WHD has been making a strong push to educate employees about wage and hour law (and other statutes). It is arming employees with tools to challenge your practices. And, of course, WHD is itself aggressively enforcing the FLSA. You should be following their lead: plan to review your payroll policies and practices to prevent liability under state and federal wage and hour law and protect your bottom line.
“What Happened, Dude?” is a weekly blog post in which we break down recent enforcement activity by the U.S. Department of Labor’s Wage & Hour Division (WHD), look at what went wrong for the employer, and share some lessons for other employers.