Defective Payroll System Failures No Defense To FLSA Violation

A group of deputy sheriffs for the Lackawanna County, Pennsylvania Sheriff’s Department sued the County alleging that they had worked overtime for which they had not been compensated. In the lawsuit, the County admitted that the deputies had worked the uncompensated hours, but argued that it owed no overtime because it had no contemporaneous knowledge that the work had been performed.

A federal court granted the deputies’ request for judgment in their favor. The Court ruled that “the FLSA requires that an employer have actual or constructive knowledge of unpaid overtime hours. Plaintiff-employees asserting FLSA claims bear the burden of proving they performed work for which they were not paid. To recover for such uncompensated overtime work, a plaintiff must demonstrate that the defendant-employer had either actual or constructive knowledge of the plaintiff’s overtime work.

“An employer, however, may not stand idly by and permit an employee to work overtime without proper compensation, even in cases where the employee does not submit a claim for overtime compensation. This duty arises even where the employer has not requested the overtime be performed or does not desire the employee to work, or where the employee fails to report his overtime hours.

“Given all of the evidence of record, the County knew or should have known the deputies had worked overtime hours. The County recognizes that the deputies did work overtime hours, and were not paid in accordance with the FLSA and state laws. The deputies input these hours into Employer’s payroll computer system, in accordance with policy for recording hours. The County’s main argument against summary judgment is that they did not have actual or constructive knowledge of the overtime hours, because the computer system it used to prepare payroll did not recognize the ‘overtime issue.’ The County asserts that it has since ‘corrected’ this matter.

“However, the computer payroll system’s deficiencies in not properly recognizing that an employee worked overtime does not excuse the County’s failure to pay its employees overtime. The County’s failure to acquire and utilize a payroll system that would recognize overtime, even when worked in separate departments, does not excuse the County from paying its employees overtime wages as required by the FLSA. The parties agree that the deputies worked overtime, and that they input this time into the payroll system, but were not compensated. Hence, even taking the facts in a light most favorable to the defendant and resolving all inferences in its favor, Lackawanna County violated the FLSA.”

Souryavong v. Lackawanna County, 2015 WL 3409472 (M.D. Pa. 2015).