This employer knew this guy worked overtime and wasn’t paid for it. But it said not getting paid was the worker’s fault. Is that a defense that can stand up in court?
No — it isn’t.
Bottom line: If an employer knew — or reasonably should’ve known — an employee worked overtime that he/she wasn’t paid for, your company’s on the hook for that overtime bill … period.
Everything else — policy and/or timekeeping violations, instructions not to report or work overtime hours, etc. — is just window dressing.
‘But it was his fault’
The Eleventh Circuit Court of Appeals just heard the case of Santonias Bailey, who worked at the title pawn shop TitleMax in Jonesboro, GA.
TitleMax had a policy in place that required employees to accurately report the hours they worked. Bailey didn’t follow this policy — but he did so under the instruction of his supervisor.
Bailey’s supervisor told him that TitleMax “does not allow overtime pay,” and repeatedly told him that his hours were too “high.” As a result, the supervisor would manually edit Bailey’s time records.
For example: Court documents revealed that at one point, she clocked him out for a lunch break that Bailey actually worked through. Another time, she clocked him out an hour before he actually stopped working.
At this point you may be saying to yourself: Well, of course the employer’s on the hook for overtime — since his supervisor was clearly guilty of some underhanded deeds. But this isn’t the end of the story.
After Bailey filed an FLSA lawsuit in an attempt to collect unpaid overtime, TitleMax brought to light another company policy that Bailey choose not to follow.
It said the company had a policy in place that required employees who had problems with their supervisors to report those problems to upper management. It said by not reporting the timekeeping edits, Bailey violated this policy.
And TitleMax claimed since Bailey violated two policies — the requirements to accurately report hours and report supervisory problems to upper management — he was at fault for not receiving overtime pay and, therefore, isn’t entitled to it.
It asked for his lawsuit to be thrown out on summary judgment.
Defense would undermine FLSA
A district court granted TitleMax summary judgment. But on appeal, the Eleventh Circuit overturned that ruling and said Bailey’s lawsuit should move forward.
It said allowing TitleMax’s defenses to win the day would undermine the purpose of the FLSA, which the court said was to:
“aid the unprotected, unorganized and lowest paid of the nation’s working population; that is, those employees who lacked sufficient bargaining power to secure for themselves a minimum subsistence wage.”
It said a ruling in favor of TitleMax would allow an employer to rely on written policies requiring the accurate reporting of work hours to dismiss a worker’s unpaid overtime claims, while simultaneously allowing supervisors to undermine those policies by encouraging, or demanding, under-reporting.
Now TitleMax is looking at having to shell out some serious cash — either in a settlement, legal fees or actual back pay penalties.
You can discourage overtime
While the FLSA, and the courts upholding it, require you to pay for all overtime hours you knew — or should’ve known — about, that doesn’t mean you’re powerless to discourage employees from working overtime.
Under the FLSA, you’re not only allowed to discourage employees from working overtime, you’re also allowed to punish workers for doing so.
But here’s the sticking point: If an employee can show he/she worked overtime that you should’ve known about — regardless of whether it was authorized or the person was punished for it — you’ve got to pay them for that time.
Cite: Bailey v. TitleMax of Georgia Inc.