THE LAW: Are employers required to pay unauthorized overtime?

In April, a jury in Massachusetts, cleared four Boston police officers of federal overtime theft and fraud claims, rejecting Department of Justice claims the officers left their overtime shifts two or more hours early but submitted fraudulent overtime slips claiming to have worked the entire shift.

The officers were apparently supposed to work an overtime shift of 4 to 8 p.m. but usually left by 6 p.m. or earlier. The prosecutors alleged the four officers received over $200,000 in false overtime pay.

The officers’ lawyers claimed the early departures were a “time-honored, accepted practice.”

Two other officers had earlier pleaded guilty to the theft and embezzlement charges in exchange for a reduced sentence.

After-hours work

Employers appreciate the employee who is willing to do some work after hours, responding to email, taking or making phone calls or otherwise engaging in work-related communications from a laptop, smartphone or other electronic device.

However, employers can unwittingly accrue liability for overtime pay as a result of such activity because they are required to pay their employees for checking and responding to work-related emails during what would normally be the employee’s personal time, if that employee is classified as “non-exempt” under the federal Fair Labor Standards Act

The rule also applies to any form of communication, such as texting, instant messaging, and phone calls. (“Exempt” employees who are paid on a salary basis do not pose any risk with regard to wage and hour exposure for their use of smartphones after work.)

Police sergeants

In one 2014 class-action case involving sergeants in the city of Chicago Police Department, the employees filed a lawsuit claiming the city owed them overtime for work the sergeants performed on their BlackBerry devices outside of their normal working hours.

The sergeants claimed that the Chicago Police Department had a “long-standing and unwritten” policy requiring them to be on call and responding to work emails, voice mails and text messages 24 hours a day, seven days a week, regardless of their location. Furthermore, the sergeants claim they were not compensated for the time spent receiving and responding to these communications.

The city denied the claim and relied on the defense that it should not be liable for overtime if it had no actual knowledge of the off-the-clock hours worked by the employees, and the employees had failed to follow the established process to report overtime work.

The lawsuit was ultimately dismissed by a federal judge, who found the city had an established procedure for filing overtime and did nothing to prevent officers from using it. The judge found no unwritten policy existed and noted that several officers who submitted the proper overtime slips for the BlackBerry work when off duty were paid for it.

Minutes add up

But assume, for example, you have a diligent employee who spends, on average, an extra 15 minutes per day after hours answering the phone and responding to texts and emails. That time results in an extra five hours a month, or 60 hours a year, or two weeks of overtime per year.

Those few extra minutes a day can cost a business substantial sums, with additional potential liability for double damages and attorney’s fees (both yours and theirs) if you failed to pay the employees for the time and you are compelled to do so as a result of litigation or a government audit arising out of a complaint by a disgruntled employee.

Of course, if the time devoted to these after-hours tasks is truly negligible, such as a short yes or no email on a rare occasion, any risk of liability is unlikely. However, lengthy discussions or long email strings may lead to a very different result.

To limit liability

While this may seem unfair to employers, they can take steps to limit their liability.

For example, employers have the right to control and regulate after-hours work. Employers should have a written policy in place that addresses and regulates after-hours work for non-exempt employees.

Such a policy could be as simple as this: “No work beyond an employee’s scheduled work hours is permitted without management’s specific preauthorization. This prohibition extends to every type of business connected activity, such as reviewing and responding to phone calls, voicemails, emails and texts outside of your regular work hours.”

Additionally, but no less importantly, the policy should require that non-exempt employees report the time they spend on after-hours work for each pay period on detailed time records, and employers should pay the employees accordingly.

Remind employees of the need for authorization before performing overtime work and also remind them of your policies against performing unauthorized work. If they disregard those instructions, follow through with discipline against employees who violate the policies (such as confiscating employer-owned phones or suspending remote access privileges).

While such policies may not provide an employer with absolute immunity, they are a good start to limiting off-the-clock claims by your employees.

Wilford H. Stone is a lawyer with Lynch Dallas in Cedar Rapids. Comments: (319) 365-9101; wstone@lynchdallas.com