One of the primary lessons from the recent class action frenzy is the importance of policing off-the-clock work. Nearly every class action lawsuit that we have recently seen has included a claim for off-the-clock work, i.e., early arrival, standing in line, donning and doffing, etc. These claims are very attractive to plaintiffs’ attorneys as they are easy to allege and difficult to disprove. In this respect, they can be the ideal glue to certify a class action. Relying on time records is no help, because the work is alleged to have happened before or after the recorded work hours. Thus plaintiffs can easily allege that they worked fifteen to thirty minutes before they signed in for their regular work without any hard evidence.
Attacking these claims is an expensive and labor intensive task as you need to interview and present sworn statements from a significant number of employees who may or may not be keen on participating in a legal proceeding. In addition, if the allegations arise in a class action setting, there are restrictions on communicating with putative class employees so that the employer must be careful and guided by counsel in securing the statements. Judges are also often skeptical of declarations when current employees are asked by their employer to sign a statement in the employer’s favor.
If you cannot defend against these claims with time records, what is an employer to do? The answer lies in strict policies and aggressive enforcement. It is absolutely critical that every employer have clear policies prohibiting off-the-clock work. Supervisors must be drilled into policing and preventing any off-the-clock work irrespective of the demands for production. That means immediate discipline for any violation. Employees should not be allowed to linger at the work premises before or after a shift. Loose enforcement of start and end times to meet production can buy the employer a business crippling lawsuit. Clear, regular start and end times are also helpful to the extent that they are possible.
To illustrate the danger of an off-the-clock work claim, consider the following sample scenario (using basic numbers for clarity). Happy Farms employs approximately 300 seasonal employees for a 30 week season every year under Wage Order 14. The employees work an eight hour workday, five days a week, earning an average of $12 per hour and are paid weekly. A former employee files a class action lawsuit alleging off-the-clock-work. This plaintiff alleges that employees were required by the employer to arrive fifteen minutes early before the regular start time to perform exercises and put on gear (gloves, etc.) before harvesting. Accordingly, he claims a minimum wage violation, waiting time penalties and inaccurate wage statement penalties. The exposure for the employer presuming class certification would be:
Minimum wage violation: $607,500 (15 minutes per day plus liquidated damages)
Waiting time penalties: $864,000 ($12 x 8 hour day x 30 days x 300 employees)
Inaccurate Wage Statements: $885,000 ($2950 per employee, max $4000)
Total Liability: $2,356,500
By having and enforcing effective written policies that are provided to the employees, you can provide your attorneys with the means to defend against these claims. In a recent California Court of Appeal decision, an employer prevailed against an employee that was claiming off-the-clock work. Jong v. Kaiser Foundation Health Plan, Inc. (2014) 226 Cal.App.4th 391. The court pointed out that the employee at issue “knew of Kaiser’s written policy that [employees] should be clocked in whenever they were working.” The court further pointed out that the employee signed a company form attesting that he would not work off-the-clock. Because of the policies and because the employer was not aware of the off-the-clock work, the employer was not liable. In reaching its decision, the Court of Appeal delineated an actual or constructive knowledge standard for employers with respect to off-the-clock work. In other words, the court found that employers are not responsible for unauthorized work performed by the employee unless the employer knew or should have known about the work at issue. Accordingly, employers with strong policies against off-the-clock work can rely on their policies and enforcement to combat these claims.
Counsel to Management: Employers should include clear prohibitions against off-the-clock work in their handbooks and written policies. They should further have employees sign a form acknowledging that they are not allowed to work before or after their start and end time or during rest or meal periods. Employers should further articulate and enforce a policy of recording all work hours. In this respect, supervisors must be well-trained on the paramount importance of keeping all work on the clock. For further guidance on off-the-clock work issues or policies, please contact The Saqui Law Group.