If facing potential fines for violating the Fair Labor Standards Act () isn't enough to motivate companies to maintain accurate payroll records, then they should be motivated by the fact that the courts will base an unpaid overtime award on the employee's records of their hours worked — even if the records are inaccurate and an overestimation. (Really, how many employees will underestimate their hours worked?)
Missing Timesheets = Missing Evidence
An employee went to court to recover overtime wages that her employer allegedly failed to pay her during her two and a half years of employment. She claimed she'd worked every single day for 132 consecutive weeks, averaging 83-85 hours of work each week. She submitted her own personal time records, which she even admitted were inaccurate. The jury awarded the employee $29,799 in unpaid overtime and $150,000 for emotional distress.
The employer appealed the award. While it conceded that it owed the employee overtime wages, it disputed what it characterized as a gross overestimation of what she was owed. However, it did not present any evidence to rebut the employee's evidence of hours worked, which the appeals court said was just and reasonable.
Said the court: Where an employer has not kept adequate records of its employees' wages and hours, the employer cannot complain about the imprecision of the damages award. (Olivas v. A Little Havana Check Cash, Inc., 11th Cir., Nos. 07-15832, 07-15881, 2009)
Lesson learned: Without accurate payroll records, you are at the mercy of a disgruntled employee and their documentation of hours worked. A jury will have no choice but to depend on the employee's perhaps imprecise information to calculate how much overtime pay the company owes.