Takeaway: This court decision illustrates that the purpose, express language and decades of judicial interpretation of the Fair Labor Standards Act all weigh heavily in favor of ensuring that employees are properly compensated for time worked. Appellate court deference to jury findings further demonstrates that employers face high hurdles in defending unpaid wage claims. Reliance on automated systems to document work hours may not be sufficient. Scrupulous attention to and periodic audits of all practices involving employees’ timekeeping and pay are essential.
Under the Fair Labor Standards Act (FLSA), an employer must pay for all work it knows about or requires, even if the employee does not specifically request compensation for it, the 2nd U.S. Circuit Court of Appeals recently held.
Whether an employee reports overtime work often will be relevant to an employer’s knowledge of the work. But allowing—or even requiring—employees to report overtime work does not absolve employers of the obligation to compensate for work they permit.
In a class-action lawsuit, a group of emergency medical technicians and paramedics (EMTs) won a multimillion-dollar verdict against their employer—the government of New York City—for unpaid overtime wages. The 2,519 employees alleged that the city required them to perform work before and after their shifts but paid them for that time only if they requested it. The jury agreed and found that the city’s failure to pay for work it required was a willful FLSA violation.
The EMTs worked eight-hour shifts. Before logging on to ambulances, EMTs must retrieve and inspect personal protective equipment, various gear and supplies. Once EMTs on an outgoing shift have returned with an ambulance, incoming EMTs must thoroughly inspect the vehicles before logging on as available to respond to emergency calls. A similar sequence of events occurs at the end of a shift.
The city’s electronic timekeeping and payroll system uses a pay-to-schedule approach. The system scans and registers an employee’s presence at the station to the minute. The system automatically pays employees only for time during their eight-hour shift, not for time performing work before or after it. That is, if an EMT scans into the system 10 minutes before and scans out 10 minutes after the shift, the EMT automatically will be paid for eight hours, not for the 10-minute intervals before and after. Rather, EMTs who perform work during these so-called “slivers” must submit overtime requests to be paid for that time. EMTs did not request overtime pay on 99 percent of the occasions they scanned in before their shifts.
On appeal, the city argued it could not be held liable for the unpaid overtime because the EMTs had an opportunity—but failed—to report overtime work. Consequently, the city did not know that it was shortchanging any employee.
“Whether an employer knows an employee is not being paid is irrelevant to FLSA liability,” the court held.
“If the employer suffers or permits the work—either by requiring it, knowing about it, or failing to exercise reasonable diligence to discover it—then it must compensate the employee, even if the employee failed to report the work and even if the employer did not know that the employee was working unpaid.”
Because the record supported the jury’s finding that the city had a policy or practice of requiring the EMTs to perform work before and after their shifts, the court upheld the jury’s verdict that the city violated the FLSA by not paying them for that work.
There also was sufficient evidence to support the jury’s finding that the city’s FLSA violation was willful. The city knew the EMTs were performing unreported extra-shift work yet took insufficient action to remedy the situation.
Nor did the trial court err in failing to instruct the jury that the EMTs had to show that 100 percent of the time included in their damages calculation was compensable. “Making such a showing would have been impossible,” the 2nd Circuit said. The EMTs adequately “showed the amount of their uncompensated work as a matter of just and reasonable inference.”
Finally, an employer may not avoid FLSA liability by segmenting extra-shift work into small tasks that separately may be deemed de minimis. Whether claimed work is de minimis generally applies to the work as a whole, not to each required task. Accordingly, the city was not entitled to have the jury determine whether one certain component of the plaintiffs’ post-shift work was de minimis and the court upheld summary judgment on that issue.
Perry v. City of New York, 2nd Cir., No. 21-2095 (Aug. 25, 2023).
Margaret M. Clark, J.D., SHRM-SCP, is a freelance writer in Arlington, Va.
