The OT violation most companies overlook

May 12, 2008 by
Filed under: Security and law, Special Report 

Technology’s made it easier for employees to work anytime, anywhere. And it may also make companies more likely to get sued for FLSA violations.

With exempt employees, catching up on work on a home computer or responding to e-mails with a BlackBerry is no big deal.

But as connectivity increases, nonexempts are more and more likely to do the same. And experts say that’ll result in a lot of lawsuits for unpaid overtime.

Most at risk are companies that give PDAs, phones and other devices to nonexempt employees, since that basically encourages them to work extra hours. But as more people buy those devices on their own and use them for work, that puts all employers at risk if the time isn’t being tracked.

Even if it’s prohibited

It’s dangerous territory, since employees don’t always tell their supervisors they’re working at home. But that doesn’t mean companies can’t be held liable. Take this example:

An administrative assistant often takes time at night to read and respond to her e-mail. She never records the time and has never told her boss that she does it.

But he regularly gets e-mails from her that are time-stamped during non-work hours. That might be enough to put the supervisor on notice that she’s doing extra work and is owed overtime.

‘De minimis’ work?

One possible defense for employers is the FLSA’s “de minimis” exception. The law says employees don’t need to be paid when they do work for “a few seconds or minutes” at a time.

In other words, if a nonexempt employee takes a couple minutes to check e-mail over the weekend, that time doesn’t need to be counted toward overtime pay. But there’s no set rule saying what’s de minimis and what isn’t, and courts have found that blocks of work as short as ten minutes have to be paid.

What to do

So far, the issue hasn’t been tested in court, but law experts warn it’s only a matter of time.

In addition to making sure any and all time worked is properly recorded, here’s how companies can avoid getting hit with those claims:

  • Update policies – You have to pay overtime even if you have a policy against working extra hours. But giving people rules about when they shouldn’t work is the best way to avoid those sticky situations.
  • Educate managers - If supervisors don’t understand the overtime regs, they may expect and encourage nonexempt employees to check e-mail and do other work at home.
  • Limit communication – If managers call or e-mail employees after hours, they may feel encouraged to work overtime. That communication should be limited to critical situations.
  • Withhold devices - If your company issues BlackBerries, laptops and other devices to employees, it might be a good idea to only give them to exempt workers.

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Comments

14 Comments on The OT violation most companies overlook

  1. Natalie on Tue, 13th May 2008 2:16 pm

    2. Thank you for your comments. In speaking on OT, for non-exempt employees, what happens if a non exempt employee is on call (which is described in their job description) and a client calls them and talk on the phone working out a situation for say a half hour, should we give that employee OT?

  2. Sam Narisi on Tue, 13th May 2008 4:50 pm

    3. Natalie,

    Talking on the phone with a customer would generally be considered “hours worked” under the FLSA.

    You may also want to check out the DOL’s Advisor on when employees must be paid for the time they spend on call:

    http://www.dol.gov/elaws/esa/flsa/hoursworked/screenER80.asp

    Hope that helps.

    Sam Narisi
    Editor
    HRTechNews.com

  3. Lou on Wed, 14th May 2008 7:25 am

    4. What about a company that says take days off for OT worked when your on call 24/7 becuase they don’t want to go over budget?

  4. Sandy Shea on Wed, 14th May 2008 2:20 pm

    5. Have non-exempt supervisor with a nextel. He is contacted over weekends with issues that most times he can resolve through the call. Other times he must report to the site. How would you expect to have such calls proven as worked time? When he is forced to come to the site, he is paid those hours at the site, should he be compensated for the travel time on those occasions? He is not normally paid for travel time.

  5. Chris on Wed, 14th May 2008 6:36 pm

    6. Sam,

    How does the use of Technology affect “time Worked” for Exempt employees?
    For example, would an Exempt employee have to be paid for a full day worked when they took off for a personal reason, but replied to e-mails for about 10 minutes? [Assuming employee had no Paid Time Off available to use]

  6. Sam Narisi on Fri, 16th May 2008 11:03 am

    7. Chris,

    Excellent point about exempt employees.

    An exempt employee has to be paid for the full day if her or she does any work that day. Taking time to reply would likely mean that an entire day’s worth of pay is due, even though the employee was supposed to be on unpaid leave.

    Hope that helps.

    Sam Narisi
    Editor
    HRTechNews.com

  7. Sam Narisi on Fri, 16th May 2008 11:09 am

    8. Lou,

    Only government employers are allowed to offer the choice of “comp time” (time off for overtime hours, instead of overtime pay). All other employers must pay time and a half for any and all overtime worked.

    Sam Narisi
    Editor
    HRTechNews.com

  8. Sam Narisi on Fri, 16th May 2008 11:39 am

    9. Sandy,

    The DOL doesn’t require employees to be paid for the time they spend traveling to the normal place of business when responding to a call. They do need to be paid, however, for traveling to other locations (like a customer’s place of business).

    That said, some companies elect to pay for travel time, or have a set minimum that must be paid to avoid resentment that might occur if an employee spends, say, an hour traveling round trip to do 15 minutes of paid work.

    Sam Narisi
    Editor
    HRTechNews.com

  9. Technology creates another FLSA trap | HRTechNews.com on Mon, 19th May 2008 6:19 am

    10. [...] written about the legal issues caused when nonexempt employees carry technical devices and work at home. But [...]

  10. terry on Tue, 20th May 2008 1:33 pm

    11. what are the differences between exempt and nonexempt ee’s?

  11. Sam Narisi on Fri, 23rd May 2008 4:35 pm

    12. Terry,

    Nonexempt employees must be paid time and half for overtime hours (any hours worked beyond 40 each week). As for what makes someone exempt or nonexempt, the factors are too numerous to describe here, but you can that info from the Department of Labor here:

    http://www.dol.gov/esa/regs/compliance/whd/fairpay/fact_exemption.htm

    Sam Narisi
    Editor
    HRTechNews.com

  12. Miranda on Fri, 20th Jun 2008 8:47 am

    13. Sam,

    I am an exempt employee with my company based on my title being a staff accountant. I have worked for this company for two years now and prior to here recently if I took time off and during the week and happened to worked over 8 hours I only used the amount of sick or vacation time I needed to show 40 hours. This is standard practice within my company. Suddenly it is a problem for the exempt employees within my department only. They are saying that even though I worked 39.50 hours for the week that I must take 5 hours sick time for one day that I left early. Can they do this?

    Thank you,

    Miranda

  13. Nicole on Wed, 25th Jun 2008 5:06 pm

    14. What if you are a non-exempt employee who is on call 24/7 but the employer pays his/her cell phone bill. Now from the website at the top it says that if you are on call but not on premises and are able to do personal things then it is not working hours. But if you use the phone then it is? and if you have to do work after hours then you should get paid for hours worked. (am i understanding this correctly)? how do you determine the hours? (is it a full days pay or should the employee keep track of it?) This all goes back to the employer paying the cell phone bill is that correct in being used as compensation for time worked after hours? I was always under the impression that if you were salary the employer could work you after 40hrs and wouldn’t have to pay you?

  14. Mary B on Tue, 15th Jul 2008 3:37 pm

    15. Sam,

    Re Miranda’s question above, I have a similar question, only to do with with a non-exempt employee. This person has often put an hour or an hour and a half down as Sick Leave, then went ahead and worked 8 or 9 hours that day, so we ended up paying her for from 9 to 10.5 hours, although the additional hours were at the regular pay rate, rather than the overtime rate. Do we have to (or can we) write a policy to not pay this employee for the sick time over and above 8 hours (or their regular work day duration, in the case of part-time employees)? We do not have a formal flex-time policy, but regularly allow employees to work any schedule that works best for them, as long as they work their full scheduled amount of hours.