A recent Time magazine item by Dan Schawbel of Millennial Branding discusses what he sees as a growing trend to abandon the traditional on-premises, 9-to-5 workday in favor of permitting employees to "work odd hours, telecommute and otherwise tweak the usual 9 to 5 grind."  Schawbel says that Generation Y employees (those born between 1982 and 1993) are spearheading this because they prioritize workplace flexibility so highly.  He warns that employers who fail to offer the option to telecommute, to work atypical hours, and to use technology to facilitate alternative work patterns run the risk of turning away a group of prospective workers projected to comprise 75% of the global workforce by 2025.

Be that as it may, it is also essential to take wage-hour compliance into account in deciding how to accommodate this trend.  Under the federal Fair Labor Standards Act alone, thorny issues are presented by employees who spend less worktime on-premises in favor of working at home and elsewhere and at unpredictable times.  Complicating matters is the fact that the FLSA is in many ways an unforgiving creature of a bygone era in which workplace flexibility was largely irrelevant.

As just one illustration, an employer's responsibility to keep an accurate record of non-exempt employees' hours worked has been a challenging task even when the employees report to a single workplace and perform their duties during a normal, fixed-schedule workday.  Employers have now been hit with FLSA claims based upon the additional timekeeping difficulties posed by the advent of helter-skelter, offsite work activities made possible by computers, personal digital assistants, and other remote-access electronics.

The U.S. Labor Department is also following these trends.  We reported last May about DOL's release of a smartphone app designed to help employees "independently track the hours they work and determine the wages they are owed."  This development likely represents an increased threat of claims by tech-savvy employees who work under non-traditional circumstances.

And while employees might favor a flexible approach in the beginning, experience suggests that some will not hesitate to make wage-hour claims later when it behooves them to do so.  Employers cannot count on successfully defending against these claims simply on the basis that the workers agreed to the arrangement, or even that they sought it out.  Neither is it is likely to be a broad-based solution to "make them all exempt."

In the end, employers who move toward letting employees "tweak the 9 to 5 grind" must commit themselves to joining this with effective methods to maintain wage-hour compliance, including measures ensuring that all hours worked by non-exempt employees are accurately recorded.  Moreover, these compliance steps will not be an autopilot proposition; they will always require vigilant, hands-on management.

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Various news items published last Friday afternoon intimated that a part of the 2012 federal omnibus appropriations law now exempts automobile-dealership service writers and similar employees* from the federal Fair Labor Standards Act's overtime requirements.  Those reports appear to have been mistaken so far as we can tell, but the spending provision does contain at least some good news in this respect.

As we noted previously, in April the U.S. Labor Department decided against acknowledging the FLSA Section 13(b)(10)(A) overtime-exempt status of dealership employees doing the typical work of service writers, service advisors, etc.  DOL thus revived its previously-disavowed interpretation that "[e]mployees variously described as service manager, service writer, service advisor, or service salesman who are not themselves primarily engaged in the work of a salesman, partsman, or mechanic as described above are not exempt under section 13(b)(10)."  29 C.F.R. § 779.372(c)(4)(emphasis added).

Section 113 of Friday's "Department of Labor Appropriations Act, 2012" says, "None of the funds made available by this Act may be used by the Secretary [of Labor] to administer or enforce 29 CFR 779.372(c)(4)."  This directive does not change the Section 13(b)(10)(A) exemption itself, but the provision does preclude DOL from devoting any of its 2012 funding to efforts to "administer or enforce" this service-writer interpretation.

However, Section 113 does not prevent current or former service writers or similar employees from pushing DOL's service-writer interpretation in support of their own FLSA overtime lawsuits.  Whether and to what extent DOL officials might explore the limits of Section 113's "administer or enforce" language by offering background assistance to any such individuals remains to be seen.  Employers facing lawsuits of this kind should certainly be alert for signs that DOL is doing so.

^*  At least one such report erroneously referred to "service technicians".

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Recent U.S. Labor Department news releases show something important about its current approach to enforcing the federal Fair Labor Standards Act:

♦       An enforcement initiative directed at Long Island, New York full-service restaurants resulted in assessments of more than $2.3 million in back-wages for 578 employees, as well as in civil money penalties of over $200,000.

♦       DOL is conducting a multi-year enforcement initiative focused upon the construction industry in Connecticut and Rhode Island, where 183 investigations of construction-industry employers have so far recovered nearly $3.3 million in back-wages for 1,226 employees.

♦       A DOL enforcement initiative focused upon hand-harvested crops in Florida has generated back-pay of over $156,000 for 689 agricultural workers and approximately $680,000 in civil money penalties.

♦       DOL is conducting a multi-year enforcement initiative focused upon the gas-station industry in New Jersey, where it has already conducted 74 investigations resulting in over $1 million in back-wages for 295 workers.

♦       An ongoing DOL enforcement initiative targeting full-service buffet restaurants in south Florida has to date resulted in 34 completed investigations involving more than $667,000 in back-wages for 271 restaurant employees, as well as in the levy of over $14,000 in civil money penalties.

♦       DOL has embarked upon an enforcement initiative focusing on the residential-care industry in North Carolina, through which officials seek to remedy what they believe to be "systemic violations" in this industry.

As this reveals, DOL's Wage and Hour Division is allocating substantial resources to broad-based regional, state, and local efforts centered around certain industries and employers.  DOL probably feels it appropriate now to make full use of the hundreds of investigators it has hired in the last two years or so, viewing them as being experienced enough to take on these efforts.  The categories involved seem for now to be among those to which DOL has devoted heightened attention in the past, that is, agriculture, day-care/residential care, restaurants, garment manufacturing, guard services, healthcare, hotels and motels, janitorial services, and temporary workers.  However, employers should not assume that the initiatives will be limited to these industries.

DOL is no doubt scheduling selected employers for compliance audits even though no individual has made an FLSA complaint.  And although DOL sometimes undertakes "directed" audits to look into specific issues, management should not necessarily expect an investigator to limit his or her inquiries to these areas.

These efforts are also likely to include compliance reviews of at least some employers whom DOL has previously found to be in violation of the FLSA.  And as the summaries above reveal, it is entirely possible (maybe even likely) that DOL will assert FLSA civil money penalties and/or will take more-serious action if these follow-on audits reveal additional shortcomings.

Employers should immediately confirm that they are fully in compliance with the FLSA and with all applicable state or local laws.

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We wrote previously about the announcement of a cooperative alliance between the U.S. Labor Department and the U.S. Internal Revenue Service aimed at ending what the Secretary of Labor called "the business practice of misclassifying employees [as independent contractors] in order to avoid providing employment protections."

If that news was not enough to get everyone's attention, the terms of the "Memorandum of Understanding" between these agencies (link to copy below; copy courtesy of CCH) should cause all employers to take notice.  DOL and IRS have agreed to implement their agreement "through enhanced information sharing and other collaboration" led by a "joint IRS-DOL team".

Some Of The Details

Among other things, DOL will "refer to the IRS .  .  . Wage and Hour Division investigation information and other data that DOL believes may raise Internal Revenue employment tax compliance issues related to misclassification."  DOL will also share "Wage and Hour Division training materials and opportunities with the IRS .  .  .."

For its part, IRS "will evaluate and classify employment tax referrals provided by the DOL and .  .  . [will] conduct examinations to determine compliance with employment tax laws."  And in at least some instances IRS is prepared to "share the employment tax referrals provided by the DOL with state and municipal taxing agencies .  .  .."

The two agencies have also committed to "coordinate national outreach activities."  This will include such steps as "joint national press releases" and "joint messages to national stakeholder organizations."  The Memorandum does not identify any of these "stakeholder organizations", but one may hazard an educated guess as to what the identities of at least some of them might be.

The administration's "transparency" mantra has been suspended where the Memorandum is concerned.  For example, the document asserts "a need for the government to provide information to other law enforcement bodies without making a public disclosure."  DOL and IRS say that they intend to preserve their "legal privileges or other legal protections against disclosure" to outsiders, and they contend that information exchanges between them will not be a "public disclosure" under the federal Freedom of Information Act.

Points To Consider

The many take-aways include these:

◊   Once again, every company or other organization relying even in part upon a contingent of independent contractors should immediately evaluate whether there is any vulnerability to a successful claim that those workers are instead employees.

◊   Every such company or other organization being investigated by DOL should assume that information provided about independent contractors will be given to IRS and, potentially at least, to analogous state or local agencies and officials.

◊   Employers must of course abide by their legal obligations in DOL and IRS investigations and audits.  But, within those parameters, management should be careful in deciding (i) what documents and other information to provide, and (ii) how, under what circumstances, and with what caveats to disclose them.  DOL and IRS say that they intend to protect certain confidential or private information and trade secrets that are covered by federal laws and regulations.  However, an employer cannot be sure whether DOL or IRS will agree with the employer (or even with one another) that each document or item of information is protected against disclosure to some other person or entity, or that a court will agree with DOL's or IRS's views in some later third-party legal action to compel disclosure.  And the best of intentions cannot preclude an erroneous, mistaken, or inadvertent release of information to the public.

◊   While the Memorandum's principal focus appears to be worker misclassification, it does not say that the collaboration is restricted to this topic.  For instance, the "joint outreach" is said also to encompass "other issues of mutual interest."

DOL IRS Memodandum of Understanding.pdf (216.50 kb)

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News that some of the nation's preeminent homebuilders have received information demands from the U.S. Labor Department under the federal Fair Labor Standards Act has drawn a variety of unhappy reactions.  But whatever one thinks about the wisdom, appropriateness, timing, or manner of DOL's move, the fact is that the administration has had the construction industry in its FLSA sights for some time now.

As we reported in May 2010, even then DOL had identified construction as being among what it calls "fissured" industries.  Officials use this term to refer to business arrangements that in DOL's view cloud the realities of the employment relationship so as to dilute the responsibility for FLSA compliance.

It is therefore likely that one important purpose of DOL's homebuilder initiative is to develop a baseline of industry- and company-specific structural information that is relevant to FLSA compliance.  For instance, investigators will no doubt be looking into whether ostensibly-separate corporations, partnerships, sole-proprietorships, and the like serving as different components in or layers of construction projects are truly independent businesses, or whether they are instead so integrated with one another as to be a single, overall enterprise.

DOL will also be delving into the extent to which even truly distinct and separate entities nevertheless collaborate about or exercise control over the workers on construction projects.  It will be doing this to judge whether each such entity is a "joint employer" of some or all of those workers so as to share individual and collective responsibility for complying with the FLSA where those workers are concerned.  This can be the case if, for example, a worker's efforts simultaneously benefit those entities under circumstances in which:

◊   There is an arrangement between or among the entities to share or interchange the worker's services;

◊   One entity is acting directly or indirectly in the interests of one or more others in relation to the worker; or

◊   The entities "are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with" one or more others.

See 29 C.F.R. Part 791.  Courts tend to evaluate the joint-employment question under factors that mostly boil down to variations on these themes.

Obviously, DOL will also be investigating whether the targeted employers have been following the FLSA's minimum-wage, overtime, recordkeeping, and child-labor requirements and restrictions.  This will include evaluations of whether these employers have erroneously treated some employees as being exempt or have misclassified employees as being "independent contractors".

Construction contractors subject to federal prevailing-wage and fringe-benefits requirements should also assume that investigators will be alert for any non-compliance with the Davis-Bacon Act or the Contract Work Hours And Safety Standards Act.

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Affected employers will no doubt have a variety of wage-hour questions in the aftermath of Hurricane Irene.  The number and scope of the issues raised might well be practically endless.  In this post, we address in very general ways the federal Fair Labor Standards Act topics that experience suggests will be among the most-pressing.

◊   What do we do about lost time records for work already performed but not yet paid?

If the only records of hours worked are lost or unusable, then there is no perfect solution.  Re-create the most accurate accounting you can under the circumstances.  Perhaps the preferred approach is to ask each employee to make the best-possible estimate of his or her hours worked. You should obtain the employee's written acknowledgement of his or her best recollection and should include the employee's authorization allowing later corrections in worktime and pay should more accurate hours-worked information become available.

◊   How do we track employees' worktime without our electronic/computerized time clocks?

Employees may record all hours worked by using handwritten timesheets.  To ensure accuracy, each employee should enter his or her own time and should record the actual times when the employee's work starts and stops each workday.

◊   As we recover, must we keep paying overtime on top of our other burdens?

At this time, there is no FLSA "emergency" exception that relieves the obligation to pay FLSA-required wages.  Employees subject to the FLSA's overtime provision must receive overtime premium at a rate of at least 1.5 times their regular rates of pay for all hours worked over 40 in the designated seven-day workweek.

If employees are covered by a collective bargaining agreement, it might contain additional overtime provisions requiring more than the FLSA does.  Perhaps the terms of the agreement relax those requirements in emergencies.  However, a collective bargaining agreement cannot override the FLSA's requirements.

◊   Can an employee volunteer to perform recovery services for us without pay?

The FLSA does not permit employees to "volunteer" unpaid time to the employer under any but the narrowest of circumstances.  For example, if a manufacturing facility sets up a hotline or makes other arrangements to provide a clearinghouse for information about the status of the workplace and employee reporting times, non-exempt employees volunteering to perform such services are engaged in compensable hours worked for FLSA purposes.  Employers considering any kind of unpaid "volunteer" services by their employees should evaluate the legality of doing this carefully and in advance.

◊   Must we keep paying employees who are not working?

Under the FLSA, for the most part the answer is "no".  FLSA minimum-wage and overtime requirements attach to hours worked, so employees who are not working are typically not entitled to the wages the FLSA requires.

One possible FLSA-related exception is for employees treated as FLSA-exempt whose exempt status requires that they be paid on a "salary basis".  Generally speaking, if such an employee performs at least some work in the designated seven-day workweek, the "salary basis" rules require that he or she be paid the entire salary for that particular workweek.  There can be exceptions here, too, such as might sometimes be the case where the employer is open for business but the employee decides to stay home for the day.

Also, non-exempt employees paid on a "fluctuating-workweek" basis under the FLSA normally must be paid their full fluctuating-workweek salaries for every workweek in which they perform any work.  There are a few exceptions, but these are even more-limited than the ones for exempt "salary basis" employees.

Of course, an employer might have a legal obligation to keep paying employees because of, for instance, an employment contract, a collective bargaining contract, or some policy or practice that is enforceable as a contract or under a state wage law.

◊   What can we do about charging missed time to vacation and leave balances?

The FLSA generally does not regulate the accumulation and use of vacation and leave.  The "salary basis" requirements for certain FLSA-exempt employees can implicate time-off allotments under various circumstances, some guidance on which the U.S. Labor Department has provided in opinion letters accessible here and here.

Again, however, what an employer may, must, or cannot do where paid leave is concerned might be affected by an employment contract, a collective bargaining contract, or some policy or practice that is enforceable as a contract or under a state wage law.

◊   When is travel time "hours worked" for purposes of computing FLSA wages due?

FLSA travel-time "rules" are not seamless, up-to-date, or necessarily logical or consistent with common sense.  The best-known ones are that:

•   Normal commuting between home and work typically is not considered to be hours worked, and

•   Travel between one assignment and another during a workday typically is hours worked.

However, even these principles are subject to exceptions and elaboration.  The best starting point is to consider each scenario an employer faces under the U.S. Labor Department's basic interpretations on travel time.  They are compiled at 29 C.F.R. §§ 785.33-785.41 and may be accessed here.

________________

Remember that other requirements, such as those applying to government contractors or subcontractors and those of states or other jurisdictions, can also be relevant to these questions.

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The U.S. Labor Department's unfounded April fluctuating-workweek commentary (earlier post here) continues to complicate many pre-existing pay plans and to cause employers to narrow their views of the available compensation alternatives.  This is the foreseeable (and apparently intended) result of what DOL said.  Unfortunately, some observers are compounding the impact of DOL's commentary by suggesting that its ramifications are more dire than ought to be the case.

We have previously noted that the federal Fair Labor Standards Act grants no regulatory authority to DOL to make such pronouncements.  Probably for this reason, the commentary purported to draw substance from sprinkled-in references to the seminal U.S. Supreme Court case of Overnight Transportation Co. v. Missel, 316 U.S. 572 (1942), which embraced the concept underlying the fluctuating-workweek calculation.  But DOL's effort is an illusion.

For example, Missel does not support DOL's assertion that paying bonuses, incentive payments, or other additional amounts is "incompatible" with figuring overtime on a fluctuating-workweek basis.  The Court did not address this proposition at all; it simply proceeded from the facts as they were presented (which involved a weekly wage for whatever hours the employee worked) and explained how FLSA overtime was to be computed on those facts.  The Court did not say, or so much as even imply, that the fluctuating-workweek calculation was inappropriate where other forms of pay are in the picture.

DOL also opined that fluctuating-workweek overtime might create an incentive to work employees long hours because it "results in a regular rate that diminishes as the workweek increases . . .."  On this premise, DOL found it inappropriate "to expand the use of this method of computing overtime pay beyond the scope of the current regulation."  Of course, the FLSA does not prescribe and in fact does not even address any maximum number of hours that adult employees can be required to work.  Moreover, DOL is not authorized to decide whether to "expand" or contract the use of the fluctuating-workweek method for computing overtime.  The Supreme Court's reading of the FLSA trumps DOL's musings in this area, and DOL must have overlooked this statement in Missel:

It is true that the longer the hours, the less the rate and the pay per hour.  This is not an argument, however, against this method of determining the regular rate of employment for the workweek in question.

316 U.S. at 580.

Having thrown sand in the gears, DOL has offered no specific elaboration upon what the actual effects of its commentary might be.  Others have filled this gap with suppositions that are not anchored in first principles.

As an illustration, assume that an employee receives a salary of $500 each workweek as straight-time pay for all hours worked and is also paid commissions on her sales made during all her hours worked each workweek.  Assume also that, in one workweek, she works 50 hours and is due $100 in commissions, for total gross pay of ($500 + $100) = $600.  Even if her commission pay is supposedly "incompatible" with fluctuating-workweek overtime, how much FLSA overtime pay is she due for that workweek?

Some have suggested that her overtime must be computed this way:

($600 ÷ 40 hrs.) = $15 Per Hr. "Regular Rate"
($15 × 1.5 × 10 OT hrs.) = $225,

for total FLSA pay of ($600 + $225) = $825.  In our view, dividing by 40 hours and paying an extra 1.5 times the resulting rate for overtime hours is not required under the FLSA, notwithstanding what DOL said.

Under Missel, the FLSA "regular rate" is determined by dividing the employee's total compensation for a workweek by the total number of hours for which that compensation was paid.  This is so whether the straight-time wages are paid for a fixed number of hours or for a varying number of hours, and it remains the bedrock principle underlying FLSA overtime pay.  See, e.g., 29 C.F.R. § 778.109.  Where the straight-time wages were paid for all of the employee's hours worked, the proper FLSA overtime premium is one-half of a regular hourly rate that declines as the hours worked increase.  See, e.g., 29 C.F.R. § 778.118.

And, more to the immediate point, this is all still true even when a fluctuating-workweek approach is "invalid or otherwise inapplicable."  See, e.g., Opinion Letter of Wage-Hour Administrator No. 1016, 69-73 CCH-WH ¶30,563 (June 24, 1969)(discussed in our earlier post).  In other words, 40 is not automatically the default divisor, and 1.5 is not the inevitable multiplier, even if a fluctuating-workweek approach has been undercut for some reason.  Whatever the basis for the employee's pay is, and even if that basis is somehow legally flawed in whole or in part, the FLSA regular rate and the overtime due still depend upon the number of hours for which the compensation was paid.  Cf. Section 32g07(b), Field Operations Handbook (U.S. Labor Department, February 28, 1986)(40 hours not used as the default divisor even for an invalid "Belo" plan).

Because our hypothetical facts show that the employee's straight-time wages were paid for all of her hours worked, the correct FLSA calculation is:

($600 ÷ 50 hrs.) = $12 Per Hr. "Regular Rate"
[($12 ÷ 2) × 10 OT hrs.) = $60 OT Premium Pay
($600 + $60) = $660,

or $165 less than the first computation.  The principles leading to this approach are independent of whatever DOL's policy preference is, and DOL has no power to curtail them.

That said, unless and until DOL withdraws or repudiates its April statements, or until a court consensus rejecting them emerges, employers should expect investigators and plaintiff's lawyers to press those statements to the hilt.  Even so, the underlying FLSA overtime principles remain unchanged, and employers who are willing to do so should be ready to assert them.

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Many compensation policies and similar documents refer to wages for non-exempt employees in the context of a "week", a "pay week", a "pay period", "the schedule", an "overtime week", or some other ambiguous word or phrase.  But the timeframe that matters under the federal Fair Labor Standards Act is a term-of-art:  A "workweek".  For instance, with few exceptions, FLSA overtime pay is due for a non-exempt employee's hours worked over 40 in a single workweek, which is not necessarily the same thing as the calendar week or an employee's scheduled week or pay period.

An FLSA workweek is a fixed, regularly-recurring period of 168 hours – that is, seven, consecutive, 24-hour periods – that the employer expressly adopts in order to maintain FLSA compliance.  FLSA recordkeeping regulations require covered employers to select and document at least one such workweek.  The workweek can be set to begin on any calendar day and at any time of day, but thereafter the employer must apply that workweek in complying with the FLSA.

If an employer has not designated and documented a workweek, or if it computes pay based upon some timeframe other than the applicable workweek, this can lead to non-compliance.  As an illustration, for the overwhelming majority of employees whose overtime must be determined on a workweek basis, the FLSA's requirements are not satisfied by paying overtime based just upon the number of hours worked over 80 in a two-week period or upon worktime exceeding 86.67 hours in a semi-monthly period.

What the workweek is can also affect what pay is due to an employee who must be paid on a "salary basis" in order to qualify for a particular FLSA exemption.  For example, the FLSA "salary basis" exemption principles say that the salary need not be paid for any workweek in which the employee performs no work.  However, to decide whether these are the circumstances, one has to know what workweek applies to that employee in the first place.

An employer is permitted to have more than one workweek under the FLSA, and the workweek does not have to be the same for every group of employees or for every location.  It is possible to establish different FLSA workweeks for different groups, for different locations, or even for different people.  Variations in work patterns or tendencies in different workforce segments can sometimes mean that it is advantageous to adopt a different workweek for a particular group or location, or even for a few particular employees.

It is possible to change a workweek, of course.  But an employer may neither do this frequently nor otherwise manipulate the workweek so as to produce a purported series of non-overtime workweeks.  Once the workweek has been established, it remains fixed regardless of the employees' schedules or numbers of hours worked.

Employers should also check into any applicable laws of a state or other jurisdiction to see whether there are any workweek-related requirements or restrictions that are different from or tougher than the FLSA's.

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Indications are that the U.S. Labor Department will be stepping-up its investigative activity among employers who are subject to federal prevailing-wage and fringe-benefits requirements.  Comments made at the agency's ongoing series of Prevailing Wage Conferences currently being held across the country suggest that its enforcement activity could rise by more than 80% in the near future.

The number of employers performing work subject to the Davis-Bacon Act and "Related" Acts, the Service Contract Act, the Contract Work Hours and Safety Standards Act, and a variety of other provisions has grown steadily over the last several years.  The proportion of companies taking on Davis-Bacon Act obligations in particular spiked dramatically beginning in 2009, as American Recovery and Reinvestment Act stimulus measures began to fund or assist various projects or to facilitate the funding of projects through certain tax-favored bonds.

During this same time, staffing levels at DOL's National Office have been beefed-up substantially in these areas.  Moreover, DOL has been adding hundreds of new investigators since early 2009, and senior officials believe that these investigators are now seasoned enough to begin to take on additional training and enforcement responsibility in this specialized field.

DOL will also be prepared to investigate complaints of non-compliance brought by an employer's competitors or by other third-parties.

Every employer that is doing business with the federal government as a contractor or subcontractor or in some other way, or that is involved in work funded through federal grants, loans, loan guarantees, tax-favored bonds, or financial aid of other kinds, should take immediate steps to confirm that it is complying with all applicable requirements.

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We previously reported on DOL's publication of a "Work Hours Calendar", a timesheet for employees to use to keep a private record of each workday’s arrival, start, stop, and departure times, along with other information.  In related comments, DOL told employees that "it is recommended that you keep your own records of all the hours you work and your pay."

In a news release this week, DOL cites that publication and goes a step further by announcing the launch of DOL's "first application for smartphones, a timesheet to help employees independently track the hours they work and determine the wages they are owed."  The free app is currently compatible with the iPhone and the iPod Touch.  DOL will explore making it available on other smartphone platforms.

Describing the new phone app, DOL's news release says:  "[U]sers conveniently can track regular work hours, break time and any overtime hours for one or more employers. This new technology is significant because, instead of relying on their employers' records, workers now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records."  (emphasis added).

According to reports, DOL has stated:  "The app also will enable users to add comments to the information; view a summary of their work hours in a daily, weekly, and monthly format; and e-mail the summary of work hours and gross pay as an attachment."  The "DOL-Timesheet" app allows employees to keep their own time records and e-mail themselves reports that they can print from their computer.  It also offers one-tap e-mail access to DOL and a link to regional DOL offices.

Once again, DOL is encouraging employees to keep what amounts to a separate set of books.  There is great potential here for needless mistakes or misunderstandings, or even for outright mischief on the part of some.  For example, most employees have no expertise in what is and is not FLSA worktime, and it is likely that "conventional wisdom" will lead many to record time in this app that does not count as compensable FLSA "hours worked".

As we noted in our previous post, employers are well-advised to be sure they can demonstrate that their records are the best accounts of all facts relevant to compliance with the FLSA and similar laws.  Among other things, employers should consider communicating explicitly to employees and managers the importance of accuracy in the employer's time records; requiring employees to report any hours-worked questions, discrepancies, or disagreements immediately; reviewing company time records on a regular basis for accuracy; correcting mistakes in the time records (with the employee's acknowledgement of the correction); and other measures designed to make the employer's records accurate and the most credible version that exists. 

Of course, employers must also educate themselves on what time must be counted as "hours worked"under the FLSA (including, but not limited to, compensable travel time) so that all such time is properly captured in the employer's records.

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