Under the terms of the Fair Labor Standards Act, employers have numerous obligations. In addition to paying covered workers a minimum wage and time-and-a-half overtime compensation, employers also have an obligation to keep to an array of records related to their workers, the time they worked, and the compensation they received. Failing to keep these records can be very damaging to an employer. For answers to questions about the FLSA’s recordkeeping requirement, get advice from an experienced Atlanta wage-and-hour lawyer.
The FLSA recordkeeping troubles of a steel mill in South Alabama began after a group of its employees discovered what they believed to be a “series of wage-and-hour violations.” Those alleged transgressions included not paying the workers for all the hours they worked and shorting them on overtime compensation.
The case was a complicated matter, implicating things like multiple regular rates of pay that “changed based on the shift worked, the way time was rounded, the level of work, and the company’s monthly incentive plan.” (The employees’ overtime claims hinged, in part, on whether or not the employer assigned the correct regular rate to all the employees’ hours.)
When you are illegally underpaid at a job, obtaining complete pay records often is crucial to the success of your FLSA case. For the mill workers, that task was vastly more difficult than it should have been.
The Requirement to ‘Make, Keep, and Preserve’ Records
As an employer, it is very important to keep in mind what the federal law demands of you regarding recordkeeping. Under 29 U.S.C. Section 211(c), employers are “required to ‘make, keep, and preserve’ all records of its employees, including those related to ‘the wages, hours, and other conditions and practices of employment.’” Employers must keep these records for a minimum of three years.
During the litigation, the court ordered the employer to hand over “key pay, time, and incentive plan records.” Not once or twice… but 12 times across two years. Whether the employer could not do so or simply chose not to do so, it never did comply with the discovery order.
The Risks of Misrepresentation and Disobeying Disclosure Orders
Whether you are an employer or an employee, beware failing to comply with court-ordered discovery obligations. Your failure can have calamitous impacts on your FLSA case (or defense.) If you are an employer defending a FLSA claim, available sanctions a court can use include deeming certain disputed and unfavorable facts to be true, barring you from arguing some (or all) of your affirmative defenses, or even giving the opposing side a default judgment in their favor.
Furthermore, another item on the “things not to do” list is making misrepresentations to the court. It can damage your credibility in the eyes of the court (which can only stand to harm your case or defense) and subject you to sanctions.
The employer in the Alabama case made this mistake, too. It tried to blame its payroll services provider, ADP, for the failure to provide the court-ordered pay records. However, after a representative of ADP testified at a court hearing, the court concluded the vendor was not the problem and that the employer had severely misrepresented the vendor’s role and actions during the litigation process.
Courts are very hesitant to award default judgments as sanctions but will do so if the malfeasance is sufficiently extreme. The steel mill case was one of those, as the employer had acted in bad faith by engaging in “willful and prejudicial discovery abuse,” leaving the judge no other option.
The 11th Circuit Court of Appeals affirmed that ruling last month.
Whether you are a worker seeking records or an employer seeking to ensure statutory compliance regarding recordkeeping, the skilled Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert can help. Our attorneys have in-depth understanding of this and other areas of the law and can provide the reliable advice you need. Contact us through this website or at 404-873-8048 to schedule a consultation today.