Human Resources News & Insights

Employee kept OT work quiet – so court says ‘no pay for it’

Chalk up a big win for employers: A worker tried to saddle her employer with a big overtime bill after resigning, but a court wasn’t having any of it.

The employee was a sewing manager at a company that makes seating for buses, trucks and vans. She was paid on an hourly basis.

After resigning, she sued her former employer under the Fair Labor Standards Act (FLSA), claiming she should be paid for the 15 to 45 minutes of work (reviewing employee schedules, gathering and distributing materials, and preparing models for production) she performed before the start of her shift.

Her employer fought the FLSA lawsuit with three arguments, highlighted by the Indiana eAuthority, a publication by labor and employment law firm Ogletree Deakins:

  1. The pre-shift activities she performed were “preliminary” and not “principal” to her work — and therefore not compensable. The court disagreed with this argument, saying that a compensable “principal” activity is one that is an “integral and indispensable part” of an employee’s duties, and her pre-shift work fit the description of “principal” activities.
  2. Her work was de minimus. The court shot this argument down as well, saying 15 to 45 minutes per day is substantial, not de minimus.
  3. The company didn’t know about her OT. This is not an easy argument to make, but the company had substantial evidence to back it up. She never told anyone in management that she was putting in extra hours. And there was no way for the company to know she was working overtime — her supervisors typically arrived two to three hours after her shifts were scheduled to begin and never saw her start work early. Based on that evidence, the court ruled there was no way for the company to know she was working overtime. Therefore it was not compensable.

This case is significant because it shows that employers aren’t powerless against overtime claims when they don’t know extra work is being performed. But it is extremely rare — and difficult to prove — that employer didn’t know overtime work was taking place.

The best way to halt unwanted overtime claims is to stop them before they can become an issue by creating a policy that says overtime work is prohibited — unless requested — and violators will be disciplined.

It’s also important to remember that when an employer finds that worker has put in overtime — even if it’s unauthorized — the worker must be paid for it. But it’s still OK to discipline the person.

Cite: Kellar v. Summit Seating, Inc.

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