“Time-Tracking Snafu” Not Willful Violation Of FLSA

“Time-Tracking Snafu” Not Willful Violation Of FLSA

September 25, 2017

The Third Circuit ruled last week that a governmental employer who failed to pay overtime due to a “time-tracking snafu” had not willfully violated Fair Labor Standards Act (FLSA). Plaintiffs in Souryavong v. Lackawanna County alleged that the County failed to pay overtime to workers who worked in two separate part-time capacities. The County had failed to aggregate workers’ total hours, and therefore failed to pay overtime rates when appropriate.

The Third Circuit decided that the failure was not “willful,” and therefore the employees were not entitled to double damages under the FLSA. The FLSA provides for liquidated, or double, damages when an FLSA violation is “willful” – when the violation is intentional, knowing, or reckless.

The Court found that the evidence did not support a finding of willfulness. The Court focused on testimony that the County’s Chief Financial Officer was “generally aware” of the County’s FLSA obligations; testimony from the Human Resources Director that she was also generally aware of FLSA requirements; and an email from the HR Director showing awareness of the problem and stating that the employee examples that she cited were not “infrequent, irregular or scattered.”

General awareness of FLSA requirements was not sufficient to prove a willful violation. Even if the Director’s email did pre-date FLSA violations with regard to the specific employees in this case, the Court did not find a degree of egregiousness necessary to award liquidated damages, unlike another case where the employer set up a system that allowed misclassification of payments to continue for nine years.

While the County did not use the best time tracking system, there was no evidence of “manipulation and concealment” that would have showed that the County intentionally underpaid.

The decision is available here