In Perez v. City of New York, the City moved for summary judgment against a variety of FLSA claims advanced by a collective of Associate Urban Park Rangers related to unpaid wages. See No. 12-CIV-4914 (PAE) (S.D.N.Y. Sept. 27, 2017). The Court granted the motion in part and denied it in part ruling on a plethora of issues including the applicable statute of limitations, allegations of willfulness, and applicable tolling. However, one aspect – its denial of summary judgment as to overtime claims where plaintiffs failed to utilize the City’s overtime reporting mechanisms – merits particular attention.
The City argued that summary judgment was appropriate as to any overtime claim based upon hours that the plaintiffs did not properly report in accordance with its web-based “City Time” time tracking software. The plaintiffs argued in opposition that the FLSA creates a non-delegable duty on behalf of employers to maintain accurate time records and that employers cannot disclaim responsibility for paying overtime whether they have reason to know that employees are working overtime.
The Court acknowledged that whether the City had “actual or constructive knowledge of uncompensated work” was an element of the plaintiffs’ claims. If the City had such knowledge, it “[could] not deny compensation simply because the employee failed to properly record or claim overtime hours.” The Court found the evidence to be conflicting in this regard and therefore held it to be a question of fact as to which summary judgment was inappropriate. The Court refused to follow White v. Baptist Memorial Health Care Corp., 699 F.3d 869 (6th Cir. 2012), which held that an employer need not compensate employees for known overtime hours if the employer had established a reasonable process for the employee to report overtime, but the employee failed to do so.
Employers are, of course, encouraged to implement appropriate time-keeping and reporting procedures as a matter of sound business policy and employee relations, apart from any requirements under the law. Moreover, Perez notwithstanding, there may be circumstances where an employee’s failure to utilize these procedures may provide a defense against liability. While the White case is non-precedential, there is authority within the Second Circuit for the proposition that where “time records were maintained and paid exactly as the employee fashioned them, meaning that any inaccuracies in the records are solely due to the employee’s deliberate failure to accurately record the time he worked…the time record deficiencies alleged by the employee are admittedly and voluntarily self-created.” Joza v. WW JFK LLC, No. 07-CV-4153 (ENV) (JO) (E.D.N.Y. Sept. 10, 2010).