On the 26th I wrote a post about wage theft, imploring employers not to do things that could be perceived as “wage theft” by their employees or by a court which might hear the case later. I did say that I thought that most cases of wage theft were caused by a lack of knowledge on the part of the employer as opposed to purposeful defrauding of the employee. As is turns out making a mistake may save you money in court as a recent case showed.
Not paying overtime when it is due is a major wage theft issue, but companies often miscalculate overtime. Often they use the wrong wage number and underpay the employee. Or, as in this case, the employee is working two part-time jobs and their total hours are not being considered for overtime purposes. For example, they work 20 hours in one job and 25 in another. Neither is sufficient to activate overtime concerns if considered on their own, but together the employee has worked 45 hours and is due 5 hours of overtime. A county government found this out the hard way.
They were accused of failing to aggregate hours for employees and thus failing to pay overtime properly. Additionally, they were accused of doing it “willfully”, which, according to attorney Emily Edmunds, would have made the employer responsible for double damages.
Poor timekeeping practices
The court found that although the CFO was aware of FLSA obligations, as was the HR Director, even to the point of stating in an email that they might have an issue, the violation did not reach the level of “willful.” According to Edmunds, the court found:
“While the County did not use the best time tracking system, there was no evidence of ‘manipulation and concealment’ that would have shown that the County intentionally underpaid.”
This decision did not relieve the county government of the responsibility of paying the owed overtime, but it did save them from having to pay it twice, plus penalties.
The lesson from this is to try to not make mistakes. Make sure your HR, payroll, and supervisory staffs understand the requirements of recording and paying overtime pay. Understand that if you have one person working multiple jobs they are still just one nonexempt employee who has to be paid overtime any time they work more than 40 hours in a week. It may require you to blend wage rates in order to determine the appropriate overtime rate. It requires that any shift differential or productivity bonuses be included in the calculation of “regular rate of pay”.
The knowledge of the FLSA is not a simple issue. It requires a knowledge of the intricacies of the law, without which you may make mistakes that will obligate the company to overtime. The good thing is you may be found to be ignorant of the law rather than willfully violating the law.