New England Biz Law Update
A recent appeals court ruling reinforced that under federal wage law, employees must be paid for all work required of them, even if occurring outside normal shifts. The decision upheld a $17.78 million judgment against New York City for unpaid wages owed to EMTs.
The Fair Labor Standards Act (FLSA) mandates that employees receive compensation for work their employer knows about or requires them to perform. But New York City had a policy of only paying EMTs if they specifically requested overtime pay for tasks done before or after scheduled shifts.
Background The city had a timekeeping system that tracked an employee’s presence at the station to the minute, but their payroll system used a pay-to-schedule approach. So if an EMT scans into the system 15 minutes before a shift, and scans out 15 minutes after, they are paid for eight hours of work. By policy, if an EMT performs work during those intervals, they must submit an overtime request.
In a class action lawsuit originally filed in 2013, over 2,500 EMTs alleged the city violated the FLSA by failing to pay for this off-the-clock work, which included inspecting equipment and vehicles at the start and end of each shift. Evidence showed EMTs rarely requested overtime pay for this extra work, resulting in widespread underpayment.
Findings A jury awarded the EMTs millions in damages, finding the city willfully violated federal wage law. On
appeal, the city argued it couldn’t be liable for work it didn’t know about, since EMTs rarely reported their additional hours.
But the U.S. Court of Appeals for the 2nd Circuit affirmed the verdict, ruling an employer’s duty to pay for mandatory work is not erased just because employees failed to request compensation. The FLSA does not require workers to report overtime for their employer to be obligated to pay them for it, the court emphasized.
“If the employer suffers or permits the work — either by requiring it, knowing about it, or failing to exercise reasonable diligence to discover it — then it must compensate the employee, even if the employee failed to report the work and even if the employer did not know that the employee was working unpaid,” the court held.
Takeaways The decision is a reminder that employers may not use time reporting procedures to evade wage obligations. Employees cannot legally waive their right to full compensation, even if an employer’s system makes requesting pay difficult. With mandated work, the onus is on the employer to ensure proper payment, regardless of what employees do.
The ruling also affirmed that lack of employer knowledge is not a defense under the FLSA. Employers have an affirmative duty to monitor whether work they require goes unreported or unpaid. Pleading ignorance does not excuse wage violations.
In upholding a stiff judgment against New York City, the court rejected an employer’s attempt to blame shortchanged workers for its own compensation failures.
The message is clear: Employers must vigilantly ensure they pay for all work asked of their employees. When mandating extra work, it is not enough to just hope for payroll reports.
