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Keep careful pay records, or else courts will take employees’ word for it

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in Human Resources,Overtime Labor Laws

Here’s another powerful reason to maintain meticulous wage-and-hour pay records. If you don’t—and a worker claims you owe him money for unpaid work—the court will rely on the employee’s recollection or records.

And now that employees have easy access to smartphone time sheet tracking apps like the one recently developed by the U.S. Department of Labor, there’s every reason to believe employees can provide pretty convincing tallies of the hours they worked and the pay they earned.

Recent case: Giorgio came to Texas from his native Italy for college and earned undergraduate and graduate degrees in business. He then went back to Italy. Soon, his cousin in Texas persuaded Giorgio to return to help launch a new Italian restaurant. The cousin got Giorgio a visa to work for his restaurant company and Giorgio moved.

About the time the restaurant was ready to open, Giorgio claimed that his cousin dismissed him. He went to work at a gelato stand.

Then he sued for back pay, claiming he regularly worked over 40 hours a week, up to 12 hours a day.

The cousin told the court that Giorgio had only worked one banquet and then willingly quit to go into the gelato business. But the cousin didn’t have any pay records, even for the alleged banquet assignment. That turned out to be a big problem.

The court explained that if em­­ployers don’t keep careful records of all time worked, then the Fair Labor Standards Act (FLSA) allows the employee’s estimate of how much and how long he worked to be used as evidence. Although the cousin claimed he had paid Giorgio for his work, he couldn’t show how he had calculated his pay or any other details—apparently not even how he was paid or how much.

The court reasoned that since the cousin admitted Giorgio worked at least some hours for which he had no records, it was unlikely that Giorgio was falsely claiming he was terminated and was now simply making up many hours of alleged work for which he wasn’t paid.

Plus, the court looked at the immigration paperwork, which clearly showed that both parties intended for Giorgio to work for his cousin. The court ordered a trial in which Giorgio can testify to his hours. (Floridia v. DLT Girls, No. 4:11-CV-3624, SD TX, 2013)

Final note: Don’t think your em­­ployees are tracking their time? Think again. Then download the time tracking app from the Depart­­ment of Labor and see how easy it is for employees to calculate exactly how much their paychecks should be, including overtime pay.

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