Dive Brief:
- An employer has the responsibility to know if it owes overtime to workers, according to a ruling by the 6th U.S. Court of Appeals in Ohio. In the ruling, the court said the sued employer “should have known” though the "exercise of reasonable diligence” if an employee is working past the 40-hour mark, according to Fortune.
- Simply put, ignorance is no excuse for workers owed overtime being underpaid, the court found.
- Perhaps the most difficult aspect of the ruling is that knowing who is working what hours matters regardless of whether or not a worker asked for OT pay. Employers with a formal no-overtime policy also can't point to their policy as a defense, Fortune reports.
Dive Insight:
In the Ohio case, a trucking company worker who also happened to be the bookkeeper worked over 40 hour regularly, but only marked herself for regular hourly pay (she was entitled to a higher rate). When she figured it out after several years, she filed suit to recover back pay.
The employer defended by claiming it had no idea, but the court discounted the excuse. Because there was a record of her hours, that was enough for her to collect. Plus, the woman's manager should have paid attention to the situation and made the adjustment long before the lawsuit, the court found.
The key lesson learned from the case is that keeping track of everyone's work hours should be baked into an employers compensation planning process and strategy. And of course, wage-and-hour lawsuits are certain to rise once the new federal overtime rules take effect on Dec. 1, 2016, mainly because it will raise the number of workers eligible for overtime.