Suppose one of your supervisory employees – for over eight years – clocked in 15 to 45 minutes before the start of her shift 5 AM early morning shift and spent most of that time doing tasks related to her normal duties. Then, your employee sues you and claims that she has been underpaid for all that time and is due overtime, double damages and attorneys fees. If you’re her employer do you win or lose this case?
Well, in this case you win according to a recent court decision by the Seventh Circuit. While normally an employer ”cannot sit back and accept the benefits without compensating for them” the court said that the employee will lose the case if the employee can’t show that the employer had actual or constructive knowledge that work was being done. In this case, top management didn’t arrive until hours after the 5 AM shift began, the employee never complained about not being paid for that time, she was aware of the employer’s policy not to work overtime without permission and, as a supervisor, she had actually reprimanded other employees for early clock-ins. The court said that although the time worked was not insignificant nor was it preliminary to her main duties, the fact that the employer had no knowledge or reason to know about the work prevented the employee in this case from recovering anything.
This ruling can be very useful in combating the recent spate of overtime claims for missed lunch periods and working off the clock without compensation when you didn’t know about it. Of course, the opposite side of this is that if you did know or had good reason to suspect that work was being done then you’ll need to pay up!
Reference: Kellar v. Summit Seating Inc.
If you have questions or would like further information, please contact Craig M. Williams at cwilliams@wp.hallrender.com or 317.977.1457
or Stephen W. Lyman at slyman@wp.hallrender.com or 317.977.1422.
