Should Employees Receive Compensation for off-the-clock phone use?
On August 3, 2017, the 7th Circuit Court of Appeals issued a favorable decision in favor of an employer in an off-the-clock case on the issue of whether the employer had knowledge of the work performed. The court held that the employer was not liable for overtime compensation because it lacked constructive knowledge that the plaintiffs did not receive overtime compensation for performing off-duty work on their cellphone.
The Fair Labor Standards Act (FSLA) requires employers to compensate nonexempt employees at time and a half of all time worked over 40 hours in a workweek. For law enforcement employees, overtime compensation is required if the individual works more than 171 hours per 28-day period. The law also requires that the employer have actual or constructive knowledge that work is being performed to obligate overtime compensation.
According to the 7th Circuit, employers must pay for the work they know about, even if they did not want the work done. In this case, the Chicago Police Department was not liable for overtime compensation because it lacked any actual or constructive knowledge that the plaintiffs did not receive overtime compensation for performing certain duties off-the-clock on their Smartphones.
Employers must pay for the work they know about, even if they did not ask for the work. If an employer prevents or discourages employees from reporting unpaid time, the presence of a process for reporting unpaid time will not protect the employer from liability.