DOL Opinion Highlights Need For Accurate Record Keeping Under FLSA

Robin Foret
June 23, 2008 — 4,728 views  
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A Recent Department of Labor Opinion Letter Highlights The Need to Maintain Accurate Employee Time Records


On May 15, 2008 the Department of Labor (“DOL”) issued an opinion in response to an inquiry concerning an employer’s break and meal policy under the Fair Labor Standards Act (“FLSA”). In addition to other areas of inquiry, the DOL responded to the question of what happens when an employee fails to take a meal break or other allotted break during the day. In some instances, the employee’s refusal to take the allotted break is in violation of a company policy stating that employees must take all such breaks during the work day. Issues raised by this problem include: whether the employee is entitled to additional straight time if the hours worked in a given workweek do not exceed 40; whether the employee is entitled to overtime if the hours exceed 40 in a given workweek despite the employee’s violation of company policy; and, what is the role of FLSA’s recordkeeping requirement for employers in such situations?


The DOL explained that time worked because of missed meal periods or other breaks are still hours worked. Under the applicable regulations, “[w]ork not requested but suffered is work time.” 29 C.F.R. § 785.11. In general, an employer may not deduct the hours worked through meal or other break time, even if the employee violated a written policy prohibiting this practice as unauthorized work time. In the alternative, an employer may take appropriate disciplinary action against the employee for violating company policy. Nevertheless, the employee must be paid for the time worked. The basic premise is that “work not requested but suffered or permitted is work time,” and includes periods in which an employee voluntarily continues to work.” 29 C.F.R. § 785.11. An employer cannot sit back and accept the benefits of an individual’s labor without expecting to pay wages. It is management’s responsibility to exercise control and to make sure that its workforce does not perform work not authorized or desired by the employer. 29 C.F.R. § 785.13.


Straight Time – If the employee is in the nonexempt salaried category under FLSA, and the additional time worked does not exceed 40 hours that week (and assuming the wages still meet applicable minimum wage requirements) additional straight time pay is not required. Compliance with minimum wage requirements means that the employee’s total wages for the workweek divided by the total number of compensable hours worked, including the unauthorized hours, equal or exceed the applicable minimum wages required under federal and state law. As long as the employee is paid at least minimum wage for all hours actually worked in that workweek, including the unauthorized time worked, there is no violation of FLSA.


Overtime – When additional time worked by a nonexempt employee results in a workweek that exceeds 40 hours, generally, the employee must be paid overtime for all hours worked over 40. This basic rule applies with equal force to employees who unilaterally choose to work overtime that has not been authorized, or which is performed in violation of company policy. Only employees who are exempt from the overtime requirements of FLSA need not be paid overtime. 29 U.S.C. § 213. Thus, employees who work through lunch periods, or otherwise violate policies against unauthorized additional hours can be disciplined, and even terminated from employment, but must be paid overtime for all hours worked in excess of 40 in any given workweek (it should be noted that many states impose additional regulations that are not addressed in this article).


Recordkeeping – In its opinion letter, the DOL reminded employers of their duty to keep accurate records of hours worked each work day and each workweek for all nonexempt employees. Retention is required for a period of 3 years. 29 U.S.C. § 211(c); 29 C.F.R. § 516.2(a)(7). There is no private right of action for an employee to enforce FLSA’s recordkeeping requirement; instead, it is enforced by the DOL. However, when an employee brings a claim for overtime or another violation of FLSA, it is the employer’s burden to come forward with evidence to challenge the employee’s claim. When an employer does not obtain and/or retain records of hours worked, an employee’s calendar, diary, or testimony may be considered evidence of hours worked. For example, an employee could claim that he or she worked through the lunch hour consistently 3 times per week for 3 years. If an employer who wishes to challenge the assertion does not have time sheets reflecting hours worked, the employer will have a difficult time meeting this burden. Moreover, a company that cannot show it acted in good faith to follow FLSA will pay liquidated damages (2x the wages owed).


Recommended Action – Employers can enforce company policies and, at the same time, comply with FLSA requirements by complying with the following guidelines: (1) have written company policies concerning breaks and require approval for additional hours worked. The remedy for violations of the policy, however, is disciplinary action; (2) if a salaried nonexempt employee works through lunch breaks, other company mandated break periods or works additional time before or after the end of a shift and the hours for the work workweek do not exceed 40, no additional compensation is required as long as minimum wage requirements are otherwise satisfied. If the hours exceed 40 in a given workweek, even if the additional hours are the result of the employee’s violation of a company policy prohibiting unapproved hours, overtime must be paid; and (3) make sure that all nonexempt employees complete time records on a weekly basis. Time records should be retained for 3 years. In the event there is a disagreement about the number of hours worked, the employer will have time records to justify all payment decisions.

Robin Foret

The Foret Law Firm

Robin Foret practices in the areas of employment law, commercial litigation and specialty insurance defense claims. She handles a variety of employment matters such as theft of trade secrets, breach of employment agreements, non-competition agreements, wage and hour issues under the Fair Labor Standards Act (FLSA), discrimination and harassment issues under Title VII of the Civil Rights Act of 1964 (Title VII) and the Texas Commission on Human Rights Act (TCHRA), the Americans with Disabilities Act (ADA), Family Medical Leave Act (FMLA) issues, and the Sarbanes-Oxley Act (SOX). Robin has handled a wide variety of employment law matters for employers, as well as for executive-level employees, before agencies, and state and federal courts.