Employers Beware… Your Policies are Only Helpful if You Can Establish They are Uniformly Enforced

Contributed by Sara Zorich

On February 22, 2012 the District Court in the Northern District of Illinois granted conditional certification of a collective action under the Fair Labor Standards Act (FLSA) for a group of hourly employees who allege that they were required by their employer to perform work while not on the clock.  Smith v. Family Video Movie Club, Inc., 2012 U.S. Dist. LEXIS 21935 (N.D. Ill. Feb. 22, 2012).

Under the FLSA, there is a two-step process for granting certification of a collective action.  The first step requires only a very minimal showing that others in the potential class are similarly situated.  The plaintiffs must make only a modest factual showing to demonstrate that they were victims of a common policy or plan.

In Smith, the plaintiffs pointed to evidence that there was an unwritten policy at Family Video Movie Club (FVMC) requiring employees to perform work off the clock and after hours including making bank deposits, running errands and buying store supplies. FVMC argued that the plaintiffs were not entitled to certification of the collective action because FVMC’s official policy stated that employees were required to clock-in for all work performed.  The court found that the written policy alone did not insulate FVMC from an FLSA action and the fact that there was some evidence that more than a rogue manager may have required employees to work off the clock was enough to support certification of the collective action.

Of note, FVMC argued that the plaintiffs were precluded from bringing their claim because FVMC had a policy that employees were required to sign their timesheets and attest to the accuracy of the time recorded on the time sheet.  However, the plaintiffs argued that they knew their time was incorrect but also knew that if they did not sign their time sheet they would not receive their paycheck.  The court stated that signing the timesheets alone did not preclude the plaintiffs’ action and FVMC could not pass the burden to comply with the FLSA onto the employee because FVMC was required to compensate employees for time worked under the FLSA.

Employers should be cognizant that hourly employees are required to be compensated for all hours worked under the law.  Thus, if an employee is required to perform work by the employer and/or on behalf of the employer, even before or after his or her scheduled work shift, the employee must be compensated for this time. Employers should train all managers and supervisors regarding this policy and consider including a wage and hour complaint mechanism in their handbook so employees can notify management if they have complaints regarding their pay or time records.  If an employee does bring an issue to the employer’s attention, the issue should be investigated and remedied (including back pay) if an error has occurred.