A recent decision from a federal appeals court highlights the perils for employers associated with lax recordkeeping of employee work hours and wage information.

It is well-established that every employer covered by the Fair Labor Standards Act (“FLSA”) is required to keep certain records for each covered non-exempt worker (i.e., those that are paid on an hourly basis and that perform duties other than professional, administrative, executive, outside sales, and certain computer-related positions). Although there is no required form for the records, they must include accurate information about the employee and data about their hours worked and wages earned. There are a variety of acceptable timekeeping methods employers can use to keep track of the hours worked by their employees. For example, they may use a time clock or they may require their workers to record their time on company timesheets. Employers may use any timekeeping method they choose so long as it produces complete and accurate records. Further, if non-exempt or exempt employees do compensable work from home or in the field, they must be compensated for that work and non-exempt employees’ hours must be recorded consistent with FLSA recordkeeping requirements.

On February 9, 2021, the United States Court of Appeals for the Fifth Circuit (which covers Texas, Louisiana, and Mississippi) reaffirmed the importance of complete and accurate recordkeeping, holding that an employer’s spotty wage records were not enough to overcome workers’ testimony of unpaid overtime wages. In Dep’t. of Labor v. Five Star Automatic Fire Protection LLC, the U.S. Department of Labor (“DOL”) sued Five Star Automatic Fire Protection LLC, a fire-sprinkler installation and service company based in El Paso, Texas, alleging that crews who typically worked for clients offsite were not being compensated for work they performed prior to and after their shifts. Continue Reading