Employer Properly Relied on Employee Reports of Hours Worked to Calculate Pay

June 16, 2009 www.hrspotlight.com

This article originally appeared on www.hrspotlight.com.

Sometimes, ignorance is bliss. According to the Eighth Circuit Court of Appeals, because an employer relied on employee reports of hours worked to calculate compensable time and did not monitor other records that could be used to demonstrate additional working time, plaintiffs' FLSA claims for additional compensation were properly rejected by the trial court. Hertz, et al. v. Woodbury County, Iowa (8th Cir. 2009).

Plaintiffs asserted claims under the Fair Labor Standards Act (FLSA) for failure to compensate them for work performed during their lengthy commute time. The plaintiffs were law enforcement officers who drove marked police vehicles from home to and from work. When an officer left home to go to work, s/he would notify a dispatcher that the tour of duty had begun and that the officer was prepared to answer calls for assistance. When an officer returned home, s/he notified a dispatcher that his or her tour of duty was complete. The employer tracked the duty status by logging these calls in a computer-aided dispatch (CAD) system. By allowing officers to commute using marked patrol vehicles, the employer hoped to diminish response time to requests for assistance and generally increase police presence.

The CAD was not used for payroll purposes or to track compensable working time. Rather, each officer was required to initial a "sign-in sheet" to indicate that the officer had worked his or her scheduled hours each day. The scheduled hours did not include any commuting time. When an officer worked overtime, s/he was required to submit an overtime slip to a supervisor indicating the amount of time worked in excess of scheduled hours. The supervisors were then responsible for approving overtime (which was rarely denied). Once approved, overtime was paid for the additional hours worked.

In order to prevail on their overtime claim, plaintiffs were required to present evidence that they worked above their scheduled hours without compensation and that the employer knew or should have known that they were working overtime. Constructive knowledge of overtime work is sufficient to establish liability if the employer, through reasonable diligence, should have acquired knowledge that plaintiffs were working overtime. The Eighth Circuit held that access to records indicating that employees were working overtime is not necessarily sufficient to establish constructive knowledge. Even though the payroll office and other county officials technically had access to the CAD records, the CAD records only were used for dispatching officers and tracking calls for service; the CAD records were not used for payroll purposes. The court noted that the standard of constructive knowledge is whether the employer should have known, not whether it could have known. Because the county had an established procedure for reporting overtime that plaintiffs had regularly used, the court found that it would not be reasonable to require the county to "weed through" nonpayroll CAD records, which would create a severe administrative burden.

This result probably would have been different if there was evidence that officers were discouraged from submitting overtime slips, if submitted slips were unpaid, if the employer was on notice that hours were regularly being underreported, or if the employer was on notice that it should have been monitoring hours more closely.

The court also rejected plaintiffs' claim that that they performed "work" during mealtimes. Plaintiffs asserted that they were entitled to overtime pay because the meal period time was in addition to the already scheduled eight-hour shift. The court held that the burden of proof in cases of disputed mealtime compensation fell upon the employee. Because plaintiffs failed to prove that their actions during their scheduled mealtimes were for the benefit of the employer, they were not entitled to overtime pay. The court recognized that requiring the employer to prove a negative-that an employee was not performing work during a time reserved for meals-would perversely incentivize employers to keep closer tabs on employees during their off-duty time. In order to prevail on a claim under the FLSA, the employee bears the burden to prove that compensable work was performed during unpaid mealtime.

Steven K. Ludwig is a partner in Fox Rothschild LLP's Labor and Employment Department, resident in the Philadelphia office. He has extensive experience representing private and public clients in the full range of labor and employment matters. He can be reached at [email protected].