Off-the-Clock Work - What It Can Really Cost Employers

Employers are increasingly vulnerable to overtime claims under the Fair Labor Standards Act, as well as state wage and hour laws, for off-the-clock work performed by employees. While based on state laws not the federal FLSA (Wal-Mart entered into a $33M settlement agreement with the DOL for FLSA violations in April 2007), Pennsylvania workers who successfully proved that they did not receive overtime pay for overtime work were able to obtain a total judgment of $141M from retail giant, Wal-Mart, including $62.3M in liquidated damages for the delay in payment. Charges that employers do not pay for all the work performed plague not only the retail industry, but also is a common problem in other industries, such as the health care industry. Uncompensated so-called "off-the-clock" time frequently occurs when employers fail to pay for work performed at vulnerable times:

• Before and after a worker's scheduled shift;


• During an employee's scheduled meal period; and


• While employees are attending staff meetings and compensable training sessions.

The Wal-Mart cases and other off-the-clock cases (police departments, nursing facility workers, and insurance claims investigators have high-profile class actions pending) offer a clear warning to employers to evaluate their own practices and seek legal counsel to develop clear policies and expectations in compliance with not only the FLSA, but also applicable state laws. If an overtime complaint has been raised against an employer, engagement of skilled legal counsel is critical to minimize legal exposure and protect against class action certification. For more information on wage claims that can be brought against an employer and steps to maintain compliance with wage laws, see this article.