Best Ohio Overtime Attorney Answer: What constitutes compensable work time? Does my employer have to have knowledge of my time in order for it to be compensable? What constitutes “knowledge” for the employer in terms of employee work time?
So, you work for an employer that says, “We don’t pay overtime.” The employer also tries keep your hours at no more than 40 by (1) having you work off the clock, (2) editing your time sheets to show no more than 40 hours per week; or (3) otherwise telling you that any time worked past your normal 40 hours will not be counted or will “count towards next week.” A lot of times, employees do not know any better. Instead, they believe that because the employer tells you in advance that they do not pay overtime and you don’t object or still come to work, that means the employer is not required by law to pay overtime. But, none of that matters. The key is: What constitutes “work time” and what makes work time compensable under the law?
The Eleventh Circuit United States Court of Appeals recently examined this issue in Bailey v. Titlemax of Georgia, Inc. In Bailey, the question presented to the Court of Appeals was simple: “whether Titlemax may defeat Mr. Bailey’s FLSA claim by deflecting the blame for the unpaid overtime onto him.”
The Fair Labor Standards Act (FLSA) requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are liable to the aggrieved employees for their back wages and an equal amount in liquidated damages, plus reasonable attorney’s fees and costs. Liquidated damages are paid directly to the affected employees.
In Bailey, the facts were that Bailey was told by his supervisor that the company did not pay overtime, but yet he often worked “off the clock,” and his supervisor would edit his timesheets to show fewer hours than Bailey actually worked each week. After filing suit against the Titlemax, claiming failure to pay overtime compensation in violation of the FLSA, the company argued that “Mr. Bailey is responsible for any unpaid overtime, because he could have complained about his supervisor, but did not.” Titlemax also complained that Bailey failed to keep his own accurate time records. This raised the question for the Court: “If an employer knew its employee underreported his hours, can it still assert equitable defenses based on the employee’s own conduct in underreporting as a total bar to the employee’s FLSA claim?” The Court’s answer was No.
Central to the Court’s holding was the fact that for the most part an employer and employee lack equal bargaining power, which is why the FLSA was drafted to be mandatorily enforced against employers to pay their employees correctly under the law. The Court explained:
In the broadest sense, this principle has guided the rulings of this Circuit, and it compels our holding here. If an employer knew or had reason to know that its employee underreported his hours, it cannot escape FLSA liability by asserting equitable defenses based on that underreporting. To hold otherwise would allow an employer to wield its superior bargaining power to pressure or even compel its employees to underreport their work hours, thus neutering the FLSA’s purposeful reallocation of that power.
Based on this reasoning, the Court held that Titlemax had “knowledge” that Bailey worked overtime, and thus, the company was not entitled to summary judgment on Bailey’s overtime claim:
Mr. Bailey has shown both required elements. He worked overtime without pay. TitleMax knew or should have known he worked overtime, because Mr. Bailey’s supervisor both encouraged artificially low reporting and squelched truthful timekeeping. She did the former by explicitly instructing Mr. Bailey to underreport his time by working off the clock. And she did the latter by herself changing Mr. Bailey’s time records to show fewer hours worked. …
TitleMax instructed its employees to accurately record their hours and to report problems with their records. Mr. Bailey worked off the clock at the behest (demand) of his supervisor, in violation of those policies. No one disputes that his supervisor knew he was working off the clock. The supervisor’s knowledge may be imputed to TitleMax, making it liable for the FLSA violation.
The end result for Bailey? Summary judgment was reversed and the case was remanded back to the district court for further proceedings. The larger implication? Bailey is good law supporting the argument that an employer can have actual or constructive knowledge of an employee’s overtime hours if it can be shown that the employer encouraged or told the employee to alter his/her timesheets or otherwise underreport his/her hours in order to avoid overtime pay.
If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at The Spitz Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at The Spitz Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call (216) 291-4744.
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