Wage/Hour Recordkeeping

Wage and Hour LawCourt Refuses to Dismiss Wage Hour Claims Due To Inadequate Time Records

 A U.S. Magistrate Judge in Miami has refused a request by a construction company to dismiss claims filed by employees for unpaid overtime and travel time.  The federal court in Miami ruled that the time records maintained by the company were in sufficient to dismiss the claims of the employees, particularly since the time records were refuted by several employees. 

Constructing A Defence

Earthmovers Corporation (Earthmovers) is a south Florida General Contractor primarily engaged in highway work for the Florida Department of Transportation (FDOT).  A group of Earthmover employees filed a law suit in September of last year claiming that they had worked overtime and had not been paid for their time by Earthmovers.  Some employees claimed that they would sometimes meet at the yard and share rides to the construction site which could be a great distance from Earthmovers’ yard.  According to the president of the company, Mr. Carlos Garcia, all employees of Earthmovers were required to begin the workday at the jobsite. When the suit was filed, the employees sued the company and Mr. Leonel Garcia, their supervisor and Mr. Carlos Garcia, President of Earthmovers.

Earth Movers maintained the following records of employees’ hours on the job:

1.       a notebook filled out by the president of the company, Carlos Garcia;

2.       records on the computer system;

3.       weekly certified payroll records sent to FDOT;

4.       certified payroll records by a third party vendor; and

5.       copies of paychecks and accounting records.

Mr. Garcia stated under oath that he visited construction sites to obtain reports on employee hours from the site supervisors.  He then logged the hours in a notebook and the hours were then reported to the office administrator who input those hours into the computer system.  Each FDOT construction site has a compliance officer who is required to monitor the hours worked by all employees on the project.  Any unpaid overtime hours must be reported and FDOT compliance officers interviewed all employees individually to insure proper payment of overtime hours.  No violations of overtime pay were reported by either the employees who sued or by FDOT compliance officers. The court also found there were no discrepancies between the hours logged by Earthmovers and the hours reported by FDOT compliance officers.  Since the company had records showing it had paid the employees for all their hours, Earthmovers filed a motion with the court to dismiss the overtime and travel time claims of the employees.

As if the time records were not enough, Earthmovers put in place a procedure to insure that the company was not committing wage violations by requesting all employees to read and sign a company document confirming they had the opportunity to report such claims and confirming that no unpaid wages existed.  One of the employees, Mr. Mejia, read and signed such a wage violation document on September 20, 2012 a few days before the lawsuit was filed against Earthmovers.   Earthmovers argued that the overtime and travel time claims should be dismissed because Mr. Mejia had signed a documents stating that no unpaid wages existed. In addition, Earthmovers’ records were verified by multiple sources and were accurate and stated that the employees were properly paid. Finally, Earthmovers argued that the travel time was not compensable time.

Court Digs Into Arguments

The court reviewed the time records submitted by Earthmovers to support their motion to dismiss the claims and found the time records to be insufficient.  In all, the company submitted to the court: 1) handwritten records showing the total weekly hours worked by employees.  This document was entitled Wage and Hour Record.  However, the handwritten record showed only the daily total hours worked by each employee.  The court noted that these time records did not show what time each employee arrived at work or left work and did not show any breaks that were taken during the work day (for example, for lunch).

Balanced against the records presented by Earthmovers, at least one of the employees submitted a statement that called into to question, the accuracy of the company’s time records.  According to one of the employees, Mr. Carlos Garcia spent approximately 20 minutes at the job site once a week, if he visited the job site during the week at all.  Another employee stated that Earthmovers had instructed him to report a reduced work schedule of 7:00 am to 3:30 pm daily and not the full hours that the employee actually worked.

In reviewing the evidence the Miami U.S. Magistrate Judge ruled that Earthmovers time records did not show what time the employees arrived at work each day or if they took any breaks during the work day or what time they left work.   Based on the time records presented and the fact that employees had submitted affidavits that controverted the time records, the court found that genuine issues of facts existed and the court could not dismiss the claims of the employees before hearing their testimony at trial.

Earthmovers also argued that the travel time requested by the employees was not compensable under the Portal to Portal Act.  The Portal to Portal Act is a provision under the Fair Labor Standards Act that states that employers are not responsible for paying minimum wage or overtime compensation for travel to and from the actual place of the principal work activity, or for activities which are merely preliminary or postliminary to the principal work activities involved.

In this case, however, the employees claimed that occasionally they were required to go to Earthmovers’ yard to pick up material or equipment.  On other occasions, the employees would report directly to the job site.  The court found that since there was a discrepancy between the employee claims and the position of the employer, travel time was an issue for the jury to decide as to whether or it was compensable under the law. Omar Del Carman, Valle Centeno, Nestor Jose Mejia, et al. v. Inc. Earthmovers Corp., Leonel Garcia and Carlos M. Garcia, Case No. 1:12-CV-23097-O’Sullivan, (S. D. Fla., September 6, 2013).

 Take Away:

Here, several employees were cross- examined by Earthmovers and were “vague” as to their memory on the hours worked and the days they claimed travel time.  Weighed against the record keeping of the employer, however, their vague memory was enough to survive the dismissal of the case.  This case highlights that it is important for employers to keep accurate daily time records for each employee.  It is not sufficient to record just 8 hours worked on Monday.  Instead, you need a record that states the precise time in, time out for lunch, time back in after lunch, and quitting time.  You do not have to use fancy swipe card systems, computers or time clocks.  A simple sheet can do.   If you don’t have a good example of the time records you need to keep, send an e-mail to your editor at gth@harpergerlach.com and I will be glad to send you the Excel document we recommend employers use, if you are keeping time records manually.

Travel time depends on the facts in each case.  An employer can require an employee to report directly to the job site and in that case travel time is normally not compensable.  However when an employee has to stop by a shop or yard to pick up equipment or drive equipment from the yard needed at the worksite, that time has been generally held to be compensable time for the employee.  If you have questions, ask a wage hour lawyer and get into compliance now, and before you have problems.

Photo courtesy of The Rake Online.
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