An employee is entitled to compensation for any hours the employer “suffers or permits” the employee to work. But what happens if the employer does not know, and does not have reason to know, that the employee was working additional unreported hours? The following cases emphasize the importance of reporting your hours worked if you want to get paid.
Reporting Hours Worked
The words “suffer” and “permit,” as used in the FLSA and California’s Labor Code statutes, means “with the employer’s knowledge.” Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 585; White v. Starbucks Corp. (N.D.Cal. 2007) 497 F.Supp.2d 1080, 1083; Jong v. Kaiser Foundation Health Plan, Inc. (2014) 226 Cal.App.4th 391, 395. “[W]here the acts of an employee prevent an employer from acquiring knowledge, here of alleged uncompensated overtime hours, the employer cannot be said to have suffered or permitted the employee to work in violation of [the FLSA].” Forrester v. Roth’s I.G.A. Foodliner, Inc. (9th Cir. 1981) 646 F.2d 413, 41-415.
In Jong v. Kaiser Foundation Health Plan, Inc. (2014) 226 Cal.app.4th 391, the plaintiff knew it was Kaiser’s policy to pay for all hours worked and to pay for all overtime hours employees recorded. The plaintiff knew how to report his hours worked, and was paid for all overtime hours he reported. Jong did not tell his employer that he had unreported hours worked, but allegedly worked off-the-clock in order to comply with the company’s budget requirements. When Jong sued his employer for unpaid overtime under the FLSA and California’s wage and hour laws, the court granted Kaiser’s motion for summary judgment, denying Jong any relief, because an employer cannot be held liable for failing to pay for hours the employee never reported.
In Forrester v. Roth’s I.G.A. Foodliner, Inc. (9th Cir. 1981) 646 F.2d 413, 414, the employer’s officials stated in their affidavits that they had no knowledge that Forrester worked uncompensated overtime hours. The plaintiff testified that he did not mention any unpaid overtime work to any store official prior to leaving his employment. Forrester knew that overtime was supposed to be reported on time sheets and the store regularly paid for reported overtime. When the plaintiff reported overtime, the company paid the overtime. The court granted the store’s motion for summary judgment, concluding:
“[W]here an employer has no knowledge that an employee is engaging in overtime work and that employee fails to notify the employer or deliberately prevents the employer from acquiring knowledge of the overtime work, the employer’s failure to pay for the overtime hours is not a violation of [the FLSA].” Forrester v. Roth’s I.G.A. Foodliner, Inc. (9th Cir. 1981) 646 F.2d 413, 414.
In White v. Starbucks Corp. (N.D.Cal. 2007) 497 F.Supp.2d 1080, the employee never told his employer that he was working off-the-clock. White and other employees recorded overtime and were paid for overtime work. White argued that the employer knew or should have known that he and other store managers could not perform the work in the time allotted, but could not identify any specific managerial employee that he told he was working off-the-clock. The court held that while the plaintiff “may be able to show a material dispute whether Starbucks had actual or constructive knowledge that some store manages sometimes worked off-the-clock, plaintiff has not submitted evidence that Starbucks had actual or constructive knowledge that [the plaintiff] worked off-the-clock.” Id. at 1084. The court granted Starbucks’s motion for summary judgment because “no reasonable jury could conclude that Starbucks knew about White’s alleged unpaid overtime.” Id. at 1085.
In Newton v. City of Henderson (5th Cir. 1995) 47 F.3d 746, Newton worked for the City as a police officer. He was assigned to work with the USDEA in East Texas. He remained a City employee and was paid by the City, but the DEA had the right to control Newton’s day-to-day functions and duties. The City’s personnel policy required employees to obtain approval prior to working overtime. Newton admitted he was only authorized to work a certain amount of overtime. When Newton submitted requests for additional overtime to the City, the City denied the request because the City could not afford to pay the additional overtime. Newton submitted time reports to the City and was paid for all of the hours claimed on those time reports. Newton never made a demand for unauthorized overtime hours until he resigned. Newton prepared separate DEA forms reflecting the overtime hours he later claimed, but he never presented the forms to the City until he resigned. Newton claimed the City knew about the additional overtime hours because he made daily oral reports of the work he was performing, but he never actually specified the number of hours he was working overtime.
The court was unwilling to hold the employer responsible for unreported overtime hours because Newton failed to follow the company’s policies to obtain approval for and to report the overtime hours worked. “In light of the fact that [the employer] explicitly ordered Newton not to work overtime and in light of the fact that Newton admits that he never demanded payment for overtime already worked, it is clear that access to information regarding the Task Force’s activities standing alone, is insufficient to support the conclusion that the City should have known that Newton was working overtime.” Id. at 749.
These cases demonstrate some of the issues employees face when bringing a wage and hour claim. Employers cannot turn a “blind eye” and force employees to work off-the-clock, but employees cannot take advantage of secretly working without the employers knowledge.
Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.
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