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In the last few months, a number of employers have reported being flabbergasted to discover non-exempt employees working very early mornings, late nights or weekends “off the clock” (after working 40 hours on-the-clock).  Apparently, no one in management asked or knew that off-the-clock work had occurred.  How does this happen?

Here are a few scenarios:

  1. Employees were told not to work more than 40 hours/week but also understood they had to complete all their work by the end of their shift (or else!);
  2. Incompetent employees were not able to complete their tasks in 40 hours but did not want anyone to know, so they worked extra hours off-the-clock;
  3. Without telling anyone, employees worked weekends and/or nights at home; or
  4. Employees loved their employer and thought they were helping to make the company better by “donating” extra hours to get the job done

In each of the above scenarios, no manager knew off-the-clock work had happened. The employer was clueless. So does the law require that employers pay employees for off-the-clock time if management did not know any work was being done? As always, no easy answer.

As we all know from HR 101, the federal Fair Labor Standards Act (FLSA) states that an employer “employs” an employee when that employee is “suffer[ed] or permit[ted] to work.”  What does that mean? Well, our federal 11th Circuit Court of Appeals made it simple. In 2007, the court ruled that an employee is “suffered or permitted to work” if “(1) he or she worked overtime without compensation and (2) the [employer] knew or should have known of the overtime work.” Allen v. Board of Public Education for Bibb County, 495 F.3d 1306, 1314–15 (11th Cir.2007). The court also stated that, “It is not relevant that the employer did not ask the employee to do the work. The reason that the employee performed the work is also not relevant. [I]f the employer knows or has reason to believe that the employee continues to work, the additional hours must be counted.”

If employers do not have actual or constructive knowledge of an employee’s overtime, it sounds like they are not required to pay overtime benefits. However, employees who sue for unpaid wages do not need to offer much in the way of evidence to create a factual dispute that will require that a jury decide whether their employer had actual or constructive knowledge of their off-the-clock work.

For example, in  the case of Lopez-Easterling v. Charter Communications, LLC, 2016 WL 892774, at *7 (N.D. Ala. Mar. 9, 2016),a federal court judge decided he could not toss the case, but needed to send it to trial, even though the manager for the defendant testified that he was unaware of any overtime worked by the employee. To rebut this, the employee simply testified that the manager did have knowledge—end of story.

Similarly, in the Allen case discussed above, the appellate court held that the trial judge should not have dismissed the case without a trial for some of the employees who “testified that their supervisors were aware of their work beyond their scheduled hours.” Even though the employer disputed the employee’s contentions, the employer “expended a significant amount of time and resources training the employees on how to properly record and turn in their time sheets,” and the employees turned in time sheets reflecting they did not work overtime. 

Two cases out of the Miami federal district court should give employers concernIn Smith v. Therapies 4 Kids, Inc., 20-61270-CIV, 2021 WL 4990610, at *4 (S.D. Fla. Aug. 23, 2021), the court refused to toss a case where the employee testified that the employer had knowledge that her job could not be completed in 40 hours. In Gilbert v. City of Miami Gardens, 12-24234-CIV, 2014 WL 12633678, at *7 (S.D. Fla. Oct. 8, 2014), the court refused to toss a case where the employee testified that her manager gave her permission to come in 30 minutes before her shift, knew she worked through lunch, maintained a heavy workload and security access records showed that she worked more hours than she had reported.

Bottom line, if an employer does not have actual knowledge, or with reasonable diligence could not have constructive knowledge of an employee’s off-the-clock work, the law says the employer is not required to pay for that time. However, there is often a factual dispute about whether an employer knew or should have known about an employee’s “off-the-clock” work. This may well require the facts to be resolved by a jury. 

Given the cost of FLSA litigation, many employers will take the practical business solution route and pay employees for the time worked. Those employers will then investigate why the work was done off-the-clock and then address those underlying reason(s). It may include limiting time worked going forward, authorizing additional time to be worked on-the-clock, hiring more employees or addressing employee performance issues.  Employers may also issue a revised written work policy and provide counseling to employees to make absolutely clear that no off-the-clock work is to be performed.