Denver Staffing Agency - Proactive Overtime Management Minimizes FLSA Liability

  • Posted by: J. Kent Gervasini |
  • 8/22/12 |
  • 6:00 PM
  • 3416 Views
Denver Staffing Agency - Proactive Overtime Management Minimizes FLSA Liability
Based on a recent ruling in the 7th Circuit Court of Appeals, Denver employers are not liable for unauthorized overtime in excess of 40 hours per week if they did not know or had reason to know of overtime worked. On December 11, 2011 the court reviewed Kellar v. Summit Seating Inc. (No. 11-1221, 7th Cir., 2011), and ruled in favor of Summit Seating, Inc. arguing that the plaintiff, Susan Kellar, did not give her employer overtime notice. On her own account she was arriving at work between 15 minutes and 45 minutes before the start of her shift, and punched the time clock at those arrival times.
 
The 7th Circuit Court of Appeals concurred that Summit was not liable for overtime pay, reasoning that the Portal-to-Portal Act, which amended the U.S. Department of Labor, the Fair Labor Standards Act (FSLA) of 1938, provides that activities that are “preliminary” to principal activities are not compensable.
 
Manage Overtime Requests with Clarity and Focus
J. Kent Staffing Managers frequently experience the complexities associated with unmanaged overtime, and advise Denver companies to supervise overtime requests and approvals with clarity and focus.  Employers  responsible for supervising, training, and mentoring their staff have a responsibility to manage their staff's overtime requests to prevent FLSA liability. Diligent overtime awareness and management will also give the the direct report manager another perspective—a better understanding of the employees':
 
  • time management ability, and
  • productivity level
Proactive and Involved Overtime Management Minimizes Your FLSA Liability
Despite this decision, employers should remain involved and proactive about managing overtime. Taking such steps should help minimize the employers liability under the FLSA.  Here are some things that Denver employers might institute to more effectively manage overtime:
 
  • You are responsible for keeping track of nonexempt employees’ hours, so you must maintain proper timekeeping policies and practices to ensure accurate re­­cord­­ing of working time.
  • This case also reinforces why it is necessary to have a well-crafted overtime policy that requires employees to obtain prior authorization to work outside your scheduled work hours.
  • All nonexempt employees are informed of overtime policies upon hire.
  • Include a statement in your Employee Handbook policies on the de minimis doctrine, which states employers are not liable under the FLSA for otherwise compensable work when the employee works only a few seconds or minutes beyond the scheduled working hours.
  • Finally, train managers to handle situations in which an employee works outside regular hours and performs unauthorized work. 
A Great General Rule Regarding Overtime
Employers should note that if you DO NOT want work to be performed, you must see that the work is NOT performed, otherwise, the employer must pay for it.
 

The Fair Labor Standards Act of 1938 – FLSA

U.S. Department of Labor, the Fair Labor Standards Act of 1938 “requires overtime pay at a rate of not less than one and one-half times a nonexempt employee’s regular rate of pay after 40 hours of work in a workweek.”

 

The information in the article above is intended for general education purposes only and should not be relied upon as a substitute for professional, legal, and/or accounting advice.

Sources:
Society for Human Resource Management (SHRM)

Ritter, David B., Business Management Daily, 07/17/2012. “Never knew about unauthorized OT? You’re not liable under FLSA.” Online at: businessmanagementdaily.com  

 
 
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