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News | Jan 01, 2011

FLSA Mythbuster: The Boss Does Not Benefit From Sloppy or Incomplete Record Keeping

In investigating wage and hour cases, The Winebrake Law Firm often consults with workers and referring counsel who believe that a wage and hour lawsuit will be too difficult to prove because the company has not maintained accurate time records, and, therefore, the worker will not have a sufficient evidentiary basis for her allegation that she worked long hours without receiving overtime pay.  This concern is especially common in cases involving “salaried” workers who have been misclassified as exempt from the FLSA’s overtime pay requirement.  Many companies do not track the hours worked by salaried employees.

It’s time to bust this myth.  As discussed below, when the boss fails to keep accurate time records, he does so at his own peril.

Courts applying the FLSA recognize that company time records frequently are inaccurate or incomplete.  According to the Supreme Court,

time clocks do not necessarily record the actual time worked by employees. Where the employee is required to be on the premises or on duty at a different time, or where the payroll records or other facts indicate that work starts at an earlier or later period, the time clock records are not controlling. Only when they accurately reflect the period worked can they be used as an appropriate measurement of the hours worked.

Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 690 (1946).
Moreover, because the company – not the worker – is obligated to maintain accurate records reflecting work hours, the lack of reliable data or recordkeeping can actually benefit the worker in litigation.  As observed by the Supreme Court:

The solution [to an employer’s lack of accurate time records] is not to penalize the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work. Such a result would place a premium on an employer’s failure to keep proper records in conformity with his statutory duty; it would allow the employer to keep the benefits of an employee’s labors without paying due compensation as contemplated by the Fair Labor Standards Act. In such a situation we hold that an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.

Anderson, 328 U.S. at 687-88.
Following the above principles, federal district courts frequently find that, in the absence of reliable time records, workers can prove their hours worked based entirely on the testimony of themselves and their co-workers.  For example, in Doo Nam Yang v. ACBL Corp., 427 F. Supp. 2d 327, 335 (S.D.N.Y. 2005), the district court recognized that “it is possible for plaintiff to meet [his] burden [of proving hours worked] by relying on his recollection alone.”  Similar holdings abound.

In sum, workers and their advocates should not allow inaccurate or incomplete time records to discourage them from pursuing their wage and hour rights.  If you, your friends, or your clients have not been paid for all hours worked, you should consult with an experienced wage and hour lawyer.

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