In today’s litigious environment, it doesn’t take much for a disgruntled employee to launch a class-action overtime lawsuit. In fact, such litigation is sweeping the country—and costing employers millions of dollars.
That’s why conscientious employers act fast to stamp out a dangerous and illegal practice: managers altering pay records to avoid paying overtime. If you catch managers cooking the payroll books, punish them promptly.
But what if the manager sues? As long as you reasonably believed the manager was altering pay records, chances are the court will back your decision—even if it turns out you were wrong.
Recent case: Wal-Mart fired manager Janet Gossage for allegedly altering a subordinate’s pay records. The worker complained that Gossage put hours she worked into another pay period, thus denying her overtime.
Wal-Mart—the target of dozens ofacross the country alleging it has a systematic policy of encouraging managers to underreport hours worked—was understandably upset. It fired Gossage for violating rules against altering pay records.
Gossage sued, alleging that the reason Wal-Mart gave was a pretext for firing her in retaliation for takinga few months earlier.
The court tossed out her case, reasoning that as long as Wal-Mart believed Gossage had violated the rule, it wouldn’t second-guess the retailer. (Gossage v. Wal-Mart, No. 3:05-CV-77, MD GA, 2007)
Final note: You simply can’t afford to let managers or supervisors alter pay records. It’s far better to pay for a few overtime hours than spend the next five years embroiled in a costly and time-consuming class-action lawsuit. Remember, if it’s a willful violation (which just about every altered-pay-records case is), you are liable for three years’ back pay, doubled as a penalty, plus attorneys’ fees.