Time Record Retention: The Proof is in the Employer's Pudding
In recent years, the U.S. Department of Labor (“DOL”) has informally partnered with advocacy groups and grassroots organizations of various states on behalf of workers. This has engendered a more proactive DOL, resulting in more cases, and more importantly, more fines. Employers that do not maintain employee time records, or keep shoddy time records are feeling the brunt of this increased enforcement.
The problem with poor time record retention is simple. If an employer fails to maintain accurate time records, an employee’s credible testimony or other evidence concerning his or her hours worked will be sufficient to prove an overtime claim. The burden of proof then shifts to the employer to show that the hours claimed were not worked. Challenging the employee’s assertion is a difficult burden without records to back up the employer.
This may have been part of the reason carwash chain Lage Management Corporation agreed in late June to pay $3.4 million in back wages and liquidated damages to almost 1200 current and former employees to settle a lawsuit brought by the U.S. Department of Labor in August 2005. This amount was in addition to the $1.3 million in back wages and damages it had already paid to 200 other employees in three previous settlements in this matter.
Although there appears to be a multitude of FLSA violations occurring at Lage Management Corporation carwashes, the inability to provide adequate time records probably doomed these carwashes from the start. The takeaway is simple. For employers who are properly paying employees for the work they provide, maintaining and ensuring that time records are accurate will help them defend themselves against future claims, respond to government requests for information, and avoid penalties for failure to comply with applicable laws.
