Seventh Circuit: Off-the-Clock Work Not Compensable Without Employer’s Knowledge

Contributed by Carly Zuba

On December 14, 2011, the Seventh Circuit held that an employee who claimed that she worked 15 to 45 minutes every day without pay before the start of her scheduled shift was not eligible for back pay under the Fair Labor Standards Act (Kellar v. Summit Seating, Inc., No. 11-1221).  The employee at issue, who was paid by the hour, would show up early to review employee schedules, make coffee, gather and distribute fabric and materials to employee workstations, clean work areas, and perform other preparatory activities.  The company, however, never told her to arrive before her shift to perform these tasks.

Though the employee reported this working time on her timecards, the court was persuaded by the fact that the employer had no knowledge of or reason to know that this pre-shift work was being performed by the employee.  Indeed, over the course of eight years of employment, the employee never told the owners (her supervisors) that she was working overtime.  The Seventh Circuit explained that the FLSA does not go so far as to require an employer to pay for work that it “neither knew nor should have known” that the employee was performing. 

This case highlights just how important it is for employers to establish a clear and effective wage and hour policy—if employers wish to prohibit unauthorized overtime, they must clearly state so through their policies.  Furthermore, employers must be vigilant in enforcing their wage and hour policies—employers should keep their eyes open for employees who are performing off-the-clock work and take the appropriate steps to prevent it. In closing, it is absolutely critical for supervisors to closely watch what is happening at that time clock; notwithstanding this case, employers still bear the heavy burden of defeating employee claims based on the hours recorded on their time cards.