To Avoid FLSA Liability, Employers Should Use Actual Time Worked

Recent cases illustrate the exposure to liability under the Fair Labor Standards Act (FLSA) that employers can avoid by using actual time worked by employees to calculate overtime, instead of using techniques designed to approximate how much to pay employees based on estimated hours worked. These cases show that the benefits of short cuts may be outweighed by the exposure to liability, costs, and distractions of litigation created by lawsuits challenging such techniques to estimate time worked. 

Recently, the United States Court of Appeals for the Fourth Circuit found in United States DOL v. Fire & Safety Investigation Consulting Servs., LLC, 915 F.3d 277 (4th Cir. 2019) that Fire & Safety, a fire investigation consulting firm in the oil and gas industry, violated the FLSA with its blended payroll policy. Fire & Safety would work its employees 12 hours a day for 14 consecutive days, followed by 14 consecutive days off. These 168 hour periods were known as "hitches."