Even in normal times, employers needed carefully to monitor overtime hours worked by employees. Lawsuits under the federal Fair Labor Standards Act and similar state laws (“FLSA”) result in significant damages, including double damages and attorney fees. Even pre-Covid, many courts reported that FLSA claims were the most common type of claim on their docket. Many diligent employers have been badly tripped up by these laws.
Remote Work Creates Overtime Landmines
The risks from overtime claims have only increased with remote working arrangements. Pre-Covid, it was possible to keep tabs on employees’ work hours simply by seeing them in the office. If an employee wasn’t logging unusual hours in the office and wasn’t asked to work remotely, an employer could assume that the employee wasn’t working abnormal hours. But such assumptions don’t hold up now that every employee is wired to work remotely, work isn’t tethered to the rhythm of office schedules, and supervisors have no personal contact to gauge hours worked.
Employers are Liable for Any Overtime they Should Have Known About
Employers are liable for overtime that the know of, or should know of. Consequently, employers ignoring signs that employees are working overtime — such as conference calls and emails at night and on weekends — will be held liable for that time. An extensive electronic trail, moreover, can easily corroborate an employee’s claim for overtime by establishing the dates and times when documents and systems were accessed, emails sent, and phone calls made.
When there is reasonable evidence suggesting that remote employees are working overtime, employers ignore it at their peril. As one court memorably stated, employers must pay for overtime work that they would have known of through reasonable diligence “even if they did not ask for the work, even if they did not want the work done, and even if they had a rule against doing the work.” Allen v. City of Chicago, 865 F.3d 936 (7th Cir. 2017).
Employers Must Be Proactive
The only way for employers reliably to minimize their exposure to overtime claims is by being proactive. Employers should distribute written policies requiring employees timely to report all overtime hours worked. Employers should remind employees to report overtime hours during times of heavy workloads or when there are obvious signs employees are working unusual hours. Employers, moreover, should not follow the common practice of requiring a supervisor to “sign-off” on overtime hours before or after the fact. Such procedures establish barriers to reporting and invite the claim that employees tried to submit overtime but were rebuffed by budget-conscious supervisors seeking to protect their own P&L’s. There should be no established obstacles to reporting.
In remote work environments, it is more important than ever for employers to have clear practices requiring and encouraging employees to timely report their overtime, in writing. With clear procedures in place, employers can then manage workloads to minimize overtime work. Employers with clear proactive procedures for employee reporting of overtime will have strong defenses against any later unexpected claim for unpaid overtime.