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Appeals Court Favors Employee In Overtime Dispute

A recent Appeals Court decision should serve as a warning to employers about the importance of clarity in communications with employees concerning policies on overtime pay and timekeeping. 

In Vitale v. Reit Management & Research, LLC, 2015 WL 4946051 (2015), the Court considered the claims of an employee who alleged that her employer had failed to pay her overtime pay she had earned. The company's employees were paid for 8-hour days which included 1-hour lunch breaks. The employer, therefore, paid overtime to employees who worked more than 45 hours per week, assuming they did not work during their lunch break. If the employees worked during their lunch hour, however, that work counted toward the overtime calculation. The employer utilized an electronic timekeeping system which, when implemented, required the employees to make separate entries to alert the company that they had worked during lunch for the purpose of the overtime calculation (because they were already paid for the lunch hour, they were not entitled to additional compensation for that time unless the overtime policy was triggered). 

There was evidence that, although it was common for employees to work during their lunch hours and the company was aware of that practice, this timekeeping requirement was not effectively communicated to the employees during the roll-out of the timekeeping program. Moreover, employees who inquired about the process for recording worked lunch hours were not uniformly instructed on the process for recording those hours. In fact, when Ms. Vitale herself inquired about the process during a week in which overtime pay would not have been triggered, she was told there was nothing she needed to do because, even with those hours, she did not meet the threshold for overtime for that week. She was never subsequently provided guidance as to how to record those hours during the weeks that overtime pay would have been triggered.

The employer defended against Ms. Vitale's claims on grounds that it had a policy that employees must obtain prior approval before working overtime, which Ms. Vitale had indisputably not done. However, the Appeals Court found that an hourly employee who seeks to prove they were denied earned overtime pay pursuant to the Massachusetts statute that governs the payment of overtime, G.L. ch. 151, ยง1A, must prove that the employer had actual or constructive knowledge that they had worked overtime. Relevant case law holds that an employer cannot accept the benefit of overtime without paying for it if it knew or should have known that the work was being performed.

There was evidence that it was ambiguous as to whether the prior approval policy applied to lunch hour work and, in any event, Ms. Vitale's supervisor had given her "general blanket approval for overtime." The Appeals Court pointed out that the burden is on the employer to ensure that employee timesheets are accurate and that employers cannot delegate that duty. With that in mind, it found that Ms. Vitale's employer had not "satisfied its timekeeping requirements." As a result, the Court concluded that there was sufficient evidence for a jury to conclude that the employer had actual or constructive knowledge that Ms. Vitale had earned overtime pay, notwithstanding the fact that she had failed to report it in accordance with company policy.

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