Q&A with Brian Burget
Mismanagement of attendance software can lead to liability
Q: There's been a dramatic increase in lawsuits filed by employees alleging wage and hour violations associated with time and attendance software programs. What exactly are the claims against employers?
A: The lawsuits filed against employers stem from the employers' alleged failure to pay for meal breaks that were missed or interrupted because of work performed by employees during that time. Employees are claiming that employers are using software programs that automatically deduct their time for meal and break periods and then fail to reconcile these deductions if and when work is performed during the specified period.
Q: So how do “auto-deduct” policies work, and how common are they in the workplace?
A: “Auto-deduct” policies automatically deduct a set amount of time from each employee's paycheck. The deductions reflect the amount of time the employee is required to take for meal and other break periods. Although time is automatically reduced, many employers implement policies for overriding the automatic deductions to ensure that payment is made to employees when breaks are either missed or interrupted. These programs are becoming more and more prevalent as employers continue to transition to computer timekeeping systems. Like all electronic timekeeping programs, auto-deduct programs provide consistent and efficient time management. The programs are reliable and useful tools for employers to manage their employees' time. Problems arise, however, when override policies do not exist, are discouraged by management or simply not followed by the employer.
Q: Are individual lawsuits the only thing employers should be concerned about?
A: No. Lawsuits against employers stemming from issues associated with time and attendance software programs often involve complaints that automatic deductions failed to recognize if and when work was performed by all employees. Therefore, under the Fair Labor Standards Act (FLSA), groups of employees can band together in a collective action lawsuit against their employer. Collective actions often result in expensive and lengthy litigation.
Fortunately for employers, courts are beginning to restrict employees' ability to file collective actions. For example, the U.S. 6th Circuit Court of Appeals recently affirmed a district court's decision to “decertify” a collective action filed under the FLSA. The lawsuit involved a step-down nurse who challenged the employer's auto-deduction policies. Following his termination, the nurse alleged that his prior employer had violated the FLSA by failing to properly compensate him and other similarly situated employees for time worked during breaks. According to the nurse, his prior employer had failed to pay for missed and interrupted meal breaks at all three of its facilities.
The 6th Circuit found that the nurse could not maintain a collective action because he failed to present substantial evidence that any other would-be or opt-in plaintiffs were similarly situated. While this is good news for employers, it doesn't completely eliminate an employee's ability to prevail in an auto-deduct collective action filed under the FLSA. An employee may still pursue a collective action if the employee can show that other employees are “similarly situated.” This is often determined by examining whether or not there are similarities in job duties, pay, employment settings and individual violations among the collective employee plaintiffs.
Q: For employers that have auto-deduct policies in place, what are some best practices for ensuring they don't violate the Fair Labor Standards Act?
A: Employers utilizing auto-deduct programs should scrutinize their policies to ensure that all time worked by employees during breaks is compensated, and employees remain fully trained to use any system in place to override the automatic deductions. Employers should consistently instruct employees on any policies that deal directly or indirectly with their obligation to report time worked during breaks. In addition, employers should document and maintain good records of this training in each employee's personnel file.
PAULA BURKES, BUSINESS WRITER