"Off the clock" work can cost retailers millions
Issue: You recently read an article stating that a court found that Wal-Mart owes overtime pay for work performed "off the clock" by workers in 27 stores. News reports talk of a $50 million price tag for a settlement of similar claims against Wal-Mart in Colorado, and lawsuits have been filed in nearly 30 other states. 

Wal-Mart is not alone, however. Other retailers face "off the clock" claims across the country and are paying substantial settlements. You wonder how you can safeguard your organization against this kind of lawsuit?

Answer:     Working "off the clock" covers a wide range of activities, both authorized and unauthorized. It may involve deliberate falsification of time records and coercion of extra, unpaid work. It may just be a dedicated worker who voluntarily works during lunch or after hours to take care of a customer or finish a report. Or it may be ignorance of an employer or supervisor as to just what activities must be counted as working time.

Whichever the situation, employers large or small face potential liability of thousands, or even millions, of dollars when these situations are exposed. In a weak economy, with pressure to keep up profit margins and do more with less, claims of this type become commonplace. Employers need to know what to be on the lookout for, and how to fix it.

When does the work clock tick? Understand exactly when the clock is ticking for wage liability. Consider these common problem areas:
  • Pre-clock activities, such as opening the store, donning uniforms or warming up trucks;
  • Arriving workers who rush to help customers before clocking in;
  • Working into or through the meal hour;
  • Staying over to finish with a customer;
  • Staying late to clean up or balance accounts;
  • Covering for a late co-worker;
  • Meetings or training outside normal hours;
  • Stocking or inventory outside normal hours;
  • Time spent on call or standing by if needed;
  • Computer, phone or other work at home.

These activities generally are compensable work, whether management requires them or employees perform them voluntarily. If management knows about the conduct and fails to stop it, the company is liable. Besides, the extra effort may not truly be voluntary, if the employees feel that their success depends on it. Note, however, that not all training or on-call circumstances require compensation.

Don’t hide extra work. Do not engage in deliberate attempts to hide off-the-clock work. Such conduct likely will lead to double awards of back pay and liquidated damages. Individual managers may create liability, even if they act contrary to company policy in order to cut costs in their own store or department.

For example, it is not appropriate to issue a policy that rigidly defines payable hours of work and then to prohibit employees from reporting additional time. It also is a violation for managers to instruct nonexempt workers to clock out and then assign additional tasks. Likewise, it is unlawful to ignore reported time or physically to change employees’ time records to avoid payment for work that actually was performed.

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