FLSA Deadly Sin #2: Off-the-Clock Work

Overlooking or Encouraging Off-the-Clock Work

Are your employees working off the clock? That can be an FLSA violation.

Meet Our Experts

Attorney Staci Ketay Rotman from Franczek Radelet.

Staci Ketay Rotman

Franczek Radelet

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Attorney Philip K. Miles from McQuaide Blasko.

Philip K. Miles

McQuaide Blasko

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Attorney Dena H. Sokolow from Baker Donelson.

Dena H. Sokolow

Baker Donelson

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Does responding to a work email while in line at the grocery store still count as work?

The answer is almost always “yes.” And those minutes add up. If you’re not paying your non-exempt employees for that off-the-clock time, you could be guilty of committing the second deadly sin: Overlooking or Encouraging Off-the-Clock Work.

The technology of today has made it easier than ever for employees to work off-the-clock, out of the office, and after hours. A recent study determined that more than 39 percent of working Americans use their cell phones to check and send emails outside of working hours – and that number is always growing. Unfortunately, overlooking that time (ie: not compensating the employee for that time) can result in some serious penalties.

Encouraging off-the-clock work by emailing urgent requests, frantically calling your employees, or texting them after hours only increases your liability in an FLSA lawsuit. “If a manager is aware of after-hours emails or texts, he or she should make sure the employee is compensated for their time,” says Staci Ketay Rotman, “it’s as simple as that.”

But what can you do if you’re not aware of the time worked? As always, ignorance is not an alibi – if an employee feels they deserve compensation for off-the-clock work, you could get hit with a hefty lawsuit. Fortunately, there are a few steps you can take to protect yourself, your company, and your employees from committing this deadly sin. We reached out to the nation’s top experts to get the answers to your most pressing off-the-clock work questions.

How will the new overtime regulations affect employees who tend to work off-the-clock?

Attorney Dena H. Sokolow from Baker Donelson.
“The new overtime regulations under FLSA, which are currently pending, According to the Department of Labor, over 4 million exempt employees will be re-classified as non-exempt (i.e. the exempt employees who do not meet the new salary threshold of $47,760/year) and will therefore become entitled to overtime when the final regulation goes into effect. While exempt employees are not required to keep track of their hours, non-exempt employees must track their "hours worked" and be paid overtime for all hours worked in excess of 40 in a workweek. Many of these formerly exempt employees are used to working "until the job gets done" without regard to the number of hours worked. Once an exempt employee is re-classified as non-exempt all of that work time must be reported and paid, including overtime. Employers who re-classify exempt employees must ensure that the employees are accurately recording and being paid for their time and not working "off the clock." Non-exempt managers often are the ones most likely to work off-the-clock. The job of a manager is very demanding. They are often trying to maximize productivity while keeping labor costs down and reducing overtime. A non-exempt manager may be tempted to take things home and finish work up after clocking out for the day in order to avoid costly overtime. Even if this is well-intentioned, it would be a violation of federal law not to pay them for the extra time worked.”

Key Takeaway

The new overtime regulations could reclassify employees who are used to being exempt from overtime as non-exempt. Many exempt employees are used to working until the job is down with little regard to how many hours the job takes. These employees will have to get used to tracking their time — even when working outside of regular working hours.

What are the most common types of off-the-clock work violations?

Attorney Philip K. Miles from McQuaide Blasko.
“Two come to mind right away. First, employees who either come in early or stay late to get their work done. Oftentimes, the employees think they’re helping by putting in the extra time – they don’t realize that it’s a huge no-no and could expose their employer to wage and hour liability. The second type of violation pops up during break times – employees who are supposed to be on an uninterrupted (and unpaid) meal break get called back into action because some work ‘emergency’ pops up.”
Attorney Dena H. Sokolow from Baker Donelson.
“Work that is "off the clock" is any work performed for an employer that is not compensated and not counted towards a worker's weekly hours for overtime purposes. The "off-the-clock" work varies by employer and even industry. All job-related activities that benefit the employer and are associated with the job should be part of the employee’s paid time. The employer is required to pay the employee for any activity that is considered part of the job or otherwise benefits the employer. These kinds of activities include:
  • Pre-shift work where the employee is asked to set up before shift, loading or warming up trucks, transferring equipment or preparing a worksite.
  • Post-shift work, including clean-up of workspace, equipment or clothing, finishing tasks that "should have" been completed during the shift, or returning to another site to drop off equipment.
  • Administrative work, like completing paperwork, attending meetings, reviewing work documents or undergoing training, work emails or calls done on an employee's own time.
  • Rework, such as when an employee is asked to redo a project or correct errors without pay.
  • Waiting for work when none is immediately available. Time between assignments or time in which the employee is required or allowed to wait for a task count as work which must be paid.
  • Working through unpaid lunch break performing work such as answering the phone, working on computer, answering client/customer questions or conducting sales.”

Key Takeaway

Employees might think they’re doing their employers a favor by working before or after hours, or through lunch, but they’re really just exposing their employer to wage and hour liability.

What are the ramifications of overlooking or encouraging off-the-clock work?

Attorney Philip K. Miles from McQuaide Blasko.
“If an employer knows (or has reason to know) about a non-exempt employee working off the clock then the employer must pay that employee for his or her time, plus an overtime premium if he or she exceeds 40 hours in a workweek. Employers who don’t pay employees for their work risk lawsuits, Department of Labor (DOL) investigations and audits, or state agency investigations and audits.”
Attorney Dena H. Sokolow from Baker Donelson.
“Whether the employer is overlooking or encouraging off-the-clock work, it is illegal. Employees can file a complaint with the Department of Labor or a lawsuit for unpaid wages under the Fair Labor Standards Act. Not only can the employee recover unpaid wages going back up to 3 years, but also "liquidated damages." An award of liquidated damages is equal to the amount you are owed in unpaid wages. For this reason, liquidated damages are often referred to as "double damages." An employee can also recover their attorney's' fees.”

Key Takeaway

Employers who fail to pay employees for off-the-clock work risk lawsuits, investigations, and audits.

What penalties can employers expect for encouraging or failing to pay for off-the-clock work?

Attorney Philip K. Miles from McQuaide Blasko.
“The liability exposure is much greater than just paying the employee the back wages – employers may get hit with liquidated damages (often effectively doubling the wages owed) and civil penalties on top of that. The statute of limitations is generally two years, but employers will be liable going back up to three years for willful violations of the wage and hour laws.”
Attorney Dena H. Sokolow from Baker Donelson.
“An employee or former employee can sue for unpaid wages on behalf of themselves and "other employees similarly situated." If an employer has a practice of not paying for off the clock work they could be looking at a potential collective action under the FLSA (where employees "opt in" to the class) or a possible class action under state wage and hour laws.”

Key Takeaway

Failing to pay for off-the-clock work is a costly mistake – and employers who willfully violate the law will be liable for backpay going back three years rather than just two.

Should employers have an off-the-clock work policy?

Attorney Philip K. Miles from McQuaide Blasko.
“Yes! The policy should explain when employees are permitted to work overtime and/or ‘off-the-clock,’ and explain what authorization is required prior to such work. Employees must record and report their work to the employer. Employees who violate the rules should face discipline, but still must be paid for their work (assuming the employer knew or had reason to know of the work).”
Attorney Dena H. Sokolow from Baker Donelson.
“Absolutely. It is very important for employers to communicate to their employees their policies on timekeeping, overtime and "off the clock" work.”

Key Takeaway

Having an off-the-clock work policy ensures employees know exactly what’s expected of them and when they’re expected to work (or not work) – protecting employers from wage and hour lawsuits pertaining to off-the-clock work.

How has technology made it easier for employees to work off-the-clock?

Through the miracle of technology, people can work from anywhere. That’s a risk for companies trying to stay FLSA-compliant.

Attorney Philip K. Miles from McQuaide Blasko.
“Through the miracle of technology, people can work from anywhere. For example, an employee can easily put in 30 minutes of work in the waiting room of the doctor’s office on his or her cell phone. That said, there’s a flip side – thanks to modern technology, employers can utilize mobile time tracking software to capture that work time. So, it cuts both ways.”
Attorney Staci Ketay Rotman from Franczek Radelet.
“Technology has made it more common for employees to perform work when not at the office. There is much more opportunity for off-the-clock work to occur with laptops, remote access, email, text, and voicemail. Employers should have procedures in place either to prohibit such work or to ensure that non-exempt employees are paid for any off the clock work.”
Attorney Dena H. Sokolow from Baker Donelson.
“Technology has allowed us the ability to work from anywhere. Employees can respond to email by phone, text a quick answer to a co-worker needing assistance on a project or use the VPN to access all work files from home. This technology can be an off-the-clock nightmare when utilized by non-exempt employees. The time a non-exempt employee spends responding to email while sitting on their couch at night is compensable time that must be recorded and paid. As technology allows for more and more possibilities for working from anywhere, employers need to be especially vigilant about all the resulting off-the-clock work.”

Key Takeaway

Technology has made it easier than ever for employees to work after hours, but it’s also made it easier for employees to track every second worked. Employers should require employees to track time in and out of the office using a mobile time tracking solution.

Can employers reclassify an employee as exempt from overtime in order for them to do off-the-clock work?

Attorney Philip K. Miles from McQuaide Blasko.
“Sure. However, exempt employees must truly fall under an exemption. This means their primary duties meet a recognized exemption, and they are paid on a salary basis of over a certain amount (this amount is currently set at $455/week; the pending new regulations will change the salary threshold to $913/week). Exempt employees are paid on a salary basis, which means they get paid a set amount regardless of how many hours they work in a given week.”

Learn More About Exempt vs. Non-Exempt Employee Classifications

Attorney Dena H. Sokolow from Baker Donelson.
“Only if the employee meets the requirements for exemption. There are three requirements to be exempt from overtime: (1) the employee is paid on a salary basis, the employee must receive predetermined amount of pay that constitutes all or part of the employee's compensation for the pay period. and may not be reduced based on the quality or quantity of the work performed; (2) the employee must be paid the salary threshold of $23,660 (which is pending an increase to $47,476); and, (3) the employee must meet the job duties tests of one of the enumerated exemptions, i.e. the employee must perform primarily "white collar" managerial work.”

Key Takeaway

Employees classified as “exempt” are paid on a salary basis – they get paid a set amount no matter how many hours they work. Employers can reclassify their employees as “exempt,” enabling them to do after hours work, but do so with caution; misclassification of non-exempt employees is yet another deadly sin.

Is overlooking off-the-clock work typically passive or actively encouraged? Are there different penalties for each situation?

“Off-the-clock work should not be encouraged or ignored. Failure to pay for time worked can quickly add up to significant backpay and other damages.”
Attorney Staci Ketay Rotman from Franczek Radelet.

Staci Ketay Rotman

Attorney Philip K. Miles from McQuaide Blasko.
“I think most employers want to follow the wage and hour laws, so (at least, in my experience) actively encouraging employees to work off-the-clock is less common. Some employers either don’t realize that they’re violating the law by allowing unpaid off-the-clock work, or find it easier to turn a blind eye rather than go out of their way to pay for that time. If the employer is willfully violating the wage and hour laws, they will face steeper civil money penalties and the liability will extend back three years instead of two.”

Key Takeaway

Most employers simply don’t realize their employees are working off-the-clock or outside of working hours, but ignorance is not an alibi. Use time tracking software to ensure employees record (and are paid for) every second worked.

Are there gray areas in what is considered work? Or is it well defined?

Attorney Philip K. Miles from McQuaide Blasko.
“There are plenty of gray areas. One example is waiting time, and the distinction between being ‘engaged to wait’ versus ‘waiting to engage’ — if an employee is not actively working, but is required to be present, then that time is likely to be compensable; as opposed to an employee who shows up early for his or her shift and is just waiting for the shift to start before clocking in, which is likely not compensable. Another tough call arises where employees have very minimal duties during their unpaid meal breaks — courts often analyze who received the ‘primary benefit’ of that time (the employer or the employee) to determine whether it is compensable. Compensable work time also includes a ‘de minimis’ exception — if an employee checks email for 30 seconds, then that time may be so short as to not require compensation; if the employee spends 30 minutes emailing, then that is not de minimis. Sometimes these lines are tough to draw. Different industries face different challenges, but the laws and the lines try to follow the same analysis.”
Attorney Dena H. Sokolow from Baker Donelson.
“Non-exempt employees must be paid for all time "suffered or permitted to work." Suffer or permit to work means that if an employer requires or allows employees to work, the time spent working is generally compensable. As a rule of thumb, “hours worked” includes: (a) all time during which an employee is required to be on duty, whether at the employer’s premises or a prescribed workplace; and (b) all time during which an employee is permitted to work, whether or not he or she is actually required to do so. The definition of “hours worked” makes no reference to employee productivity, meaning that “hours worked” might even include time when an employee is inactive or does not engage in work productive to the employer.”

Key Takeaway

There are plenty of gray areas when it comes to off-the-clock work. Was the employee required to be present? Did they log enough time to require off-the-clock work compensation? It’s always best to check with your employment counsel to determine whether or not an employee’s off-the-clock work is compensable.

What is the easiest way for employees to keep track of quick off-the-clock work, like checking email?

Attorney Philip K. Miles from McQuaide Blasko.
“The important thing is that the time gets recorded, whether it’s through time-tracking software, emailing a ‘note-to-self,’ or even just writing it down on a notepad.”
Attorney Staci Ketay Rotman from Franczek Radelet.
“It depends on the industry, technology available, and enforcement of the policy. Time records can be kept manually on timesheets, computer software, security logs, apps, etc. Also, if a manager or supervisor is aware of after-hours email or texts, particularly if the manager or supervisor is on the communication, he or she should make sure the employee is compensated for any such work time. What matters most is that the employer provides an avenue for employees to accurately keep track of their hours worked and reviews the time records to ensure they are accurate.”
Attorney Dena H. Sokolow from Baker Donelson.
“The FLSA does not require time clocks or dictate how work hours are recorded. When recording working time under the FLSA, "infrequent and insignificant periods of time beyond the scheduled working hours, which cannot as a practical matter be precisely recorded for payroll purposes, may be disregarded [as de minimis time]." This rule applies only where there are uncertain and indefinite periods of time involved, a few seconds or minutes in duration, and where the failure to count such time is justified by industrial realities. It is important to remember, however, that an employer may not arbitrarily fail to count any part, however small, of working time that can be practically ascertained.”

Key Takeaway

Find a mobile, cloud-based time tracking software that works for your business and ask your employees to track every second worked.

What typically triggers a lawsuit related to off-the-clock work?

Attorney Philip K. Miles from McQuaide Blasko.
“An angry employee. Or a group of angry employees. Sometimes employees are happy to work a little extra because they like their job, or receive some side perks (like better performance evaluations and positive recognition from supervisors); but when something goes wrong, and they’re not so happy, they start calling attorneys and the DOL. Obviously, employers never know when a relationship will deteriorate in the future, so compliance is essential. There are, of course, other triggers, but unhappy employees lead the list.”
Attorney Staci Ketay Rotman from Franczek Radelet.
“When an employee becomes unhappy at work or is terminated, that is when we generally see a lawsuit filed.”

Key Takeaway

Angry or unhappy employees file lawsuits because they feel they’ve been undercompensated or wronged by the employer. Nip these problems in the bud by focusing on compliance before the problem escalates to an FLSA claim.

In Short

  • Have an off-the-clock work policy in place to ensure that your employees know exactly when they’re expected to work (or not work)
  • Require your employees to track their hours worked (both in and out of working hours) using a mobile, cloud-based time tracking software
  • Avoid risk by always paying employees for every second worked – even after hours
  • Reclassify employees as “exempt” at your own risk – it may help eliminate off-the-clock work problems, but it could cause bigger misclassification problems down the line
  • Focus on compliance NOW, before an unhappy employee comes forward with an off-the-clock work claim

Meet The Experts

Attorney Staci Ketay Rotman from Franczek Radelet.

Staci Ketay Rotman

Staci Ketay Rotman is the Community Investment Officer and Co-Chair of the Wage and Hour Practice Team at Franczek Radelet Attorneys and Counselors. She's the editor and co-author of the firm's wage and hour blog (wagehourinsights.com) and she has also co-authored a number of articles on wage and hour topics. Staci advises and represents employers in all aspects of labor and employment law.

Attorney Philip K. Miles from McQuaide Blasko.

Philip K. Miles

Philip Miles is an attorney with McQuaide Blasko in State College, Pennsylvania. Since joining the firm, Philip has concentrated his practice on labor and employment law. He and the firm's labor and employment law team represent clients ranging from individuals to small businesses to large employers with thousands of employees. Miles also publishes a highly regarded independent employment law blog (lawfficespace.com) featuring commentary on cases, current events, and other developments in the field of employment law.

Attorney Dena H. Sokolow from Baker Donelson.

Dena H. Sokolow

Dena H. Sokolow has more than 20 years of experience counseling and defending employers and management on a wide range of labor and employment matters. She partners with her clients (which range from startups to Fortune 500 companies) to best position them to avoid employment law claims or, at a minimum, put the company in the strongest position to defend such claims. She regularly conducts customized audits to ensure compliance with federal and state employment legal requirements (such as wage and hour practices) and conducts management and employee training on a variety of topics that are specifically tailored to each employer's policies, practices, and particular needs.