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Employers Must Carefully Document Employees’ Hours

On Behalf of | May 11, 2016 | Employment Law

A March 22, 2016 decision by a federal New Hampshire trial judge illustrates the need to keep accurate employee time records.  In the case of Yin Gui Chen v. C & R Rock, Inc., et al, Chen received a judgment in the amount of $16,930.76 for his claims of underpaid wages and overtime pay as a cook at the Peking Tokyo restaurant in Lebanon, New Hampshire.  To refute Chen’s claims of not being paid for all the time he worked, the restaurant responded with detailed employee work schedules corresponding with the paid hours reflected on Chen’s pay stubs. However the judge pointed out those prospective work schedules are not proof of actual hours worked.  Those work schedules were evidence as to the days Chen actually worked since he was scheduled to work, but not the amount of hours that he worked those days.  Chen, himself, testified that he worked many more hours than the work schedules indicated and specified those hours. The judge determined that Chen proved he had worked some of those hours and they totaled wages due for both straight time and totaling $8,465.38. The evidence showed that the restaurant did have the ability for employees to punch in through the computer the time for their hours worked, yet Chen, who did not speak English, had never been told how to use that computer.

Under both the federal and state wage laws, the amount of wages owed by the employer can be doubled if there is a willful violation of the statute and the judge considered in part as a reason to find a willful violation of the wage statutes that the restaurant had required Chen in an employment agreement to report any wage statement errors to the restaurant within two weeks of the wage statement or otherwise waive those rights.  Such a waiver is in violation of the law and became part of the judge’s reasoning for doubling the damages from $8,465.38 to $16,930.76. While the amount owed is not huge, it is a significant expense to a small business.

A take away for small businesses is that they just like large businesses must keep accurate records of employees’ hours actually worked and not merely scheduled to work, whether it is requiring the employees at the end of their actual work shift to fill out a time card manually for that day, time punch into a computer, or take some other measures to have the employee accurately record the actual hours he or she works each day. While Chen, in this case, was an hourly employee, issues also come up when an employee is paid salary, but it is determined under federal law to have the benefit of time and one-half overtime paid for hours worked above 40 hours.  Merely calling somebody a salaried employee can make him salaried up to the 40 hours, but if he is working over 40 hours and is not exempt under certain exceptions of federal law, the employer may ultimately be in the difficult position of having an employee make an overtime claim of hours worked in excess of 40 hours with no time cards because the employer believed it need not keep time records for salaried employees.  Speaking with employment counsel as to how to address these issues can be very cost effective in taking steps to avoid a problem before it occurs.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].