A huge win for employers on smartphone, OT pay issue
Check out the two-pronged test that saved this employer’s bacon in a recent overtime pay class-action lawsuit.
By all accounts officers in the Bureau of Organized Crime unit of the Chicago Police Department appear to have performed compensable off-duty overtime work on their BlackBerry smartphones. But, they won’t be paid for it.
The reason? Here’s how a U.S. district court in Illinois put it: “the FLSA stops short of requiring the employer to pay for work it did not know about, and had no reason to know about.”
The Chicago Police Department didn’t know how much off-duty work officers were performing on their smartphones, despite having a proven system in place to pay officers for all reported off-duty work, so it’s off the hook for officers’ overtime pay claims.
The test
In an FLSA lawsuit that began back in 2010, Sgt. Jeffrey Allen accused the Chicago Police Department of intentionally failing to pay him and other similarly situated officers for all of the time they spent performing essential work functions on their smartphones while off-duty.
To determine whether Allen and his fellow officers were entitled to overtime pay for the work, the court applied this two-pronged test:
- Did the officers perform compensable work for which they weren’t paid? The answer: In many cases, “yes.”
- Did the Chicago Police Department know the employees performed the work? The answer: “No.”
That final “no” is the reason the officers won’t be paid for it.
In answering the second question, the court looked at whether the department had a policy — written or unwritten — that would’ve unjustly prevented the officers from reporting the off-duty work time.
The question of whether there was a written policy was quickly answered: “no.”
The question of whether there was an unwritten policy wasn’t as clear — as the plaintiff officers accused the department of creating a culture in which working overtime was frowned upon (i.e., an unwritten policy).
But that argument failed to sway the court for one reason: Several officers had testified that they’d reported on their time slips off-duty work activities that they performed on their BlackBerrys, and they were paid for that time.
The court said this proved that there was no common understanding that off-duty work would not be compensated.
Case closed.
Great news for employers
This is a big win for employers, as it makes it more difficult for employees who fail to report all of their hours to win unfair pay and overtime lawsuits.
The court’s ruling reiterated that to win such suits employees not only need to be able to show they performed compensable work — which needs to be a primary part of the employees’ jobs — but also that their employer knew or should’ve known that the work was performed.
But the ruling also provides a valuable takeaway for employers, as well. It shows the need to have a well-documented and easy-to-use system that employees can use to report off-the-clock (or off-duty) work.
Not only was the Chicago Police Department able to show it had a system in place for officers to use to report off-duty work, but it also showed that when officers used it they got paid.
Still, even with a system like that in place, other court rulings have shown that if a manager knows an employee is working extra hours, the employer is on the hook to compensate the employee for that time. So it’s vital that you make sure managers are reporting any off-the-clock work non-exempt employees perform that those employees aren’t reporting themselves.
Cite: Allen v. City of Chicago
