Is Your Business Affected by “Blackberry Overtime?”

BlackberryWith a glance around the office (or anywhere else, for that matter) one quickly realizes that it is easier to count the number of people without smart phones than it is to count those who use one. A PEW internet survey reported that more than 45% of all adults in the United States are smart phone owners. That number jumps to more than 66% among adults between the ages of 18 and 29. Smart phones are here to stay, and so, perhaps, are the problems that they pose for businesses.

No one could have predicted in 1992, when the first PDA functions were combined with cellular phones, that the rate of FLSA lawsuits would be heavily impacted by the new technological changes on the horizon. Since then, the release of the Blackberry, iPhone and other smartphones has cost employers thousands of dollars in overtime pay and legal fees under the Fair Labor Standards Act (FLSA); a law that has gone relatively unchanged over the past 75 years.

In 1993 there were 1,457 wage and hour lawsuits filed under the FLSA. Compare that to the record breaking 7,064 lawsuits filed in 2012. The vast majority of these lawsuits are the result of misclassification of employees and the failure to pay overtime.  One reason cited for the large increase is the use of smartphones to increase employee productivity, but that increase has come at a price for many employers. Employees complain that the lines between work and personal time have become blurred. They are now expected to work evenings, weekends and even while on vacation without being compensated for their time; a practice that has not gone unnoticed.

An employee of the Chicago Police Department’s (CPD) Bureau of Organized Crime, Jeffrey Allen, filed a FLSA complaint for unpaid overtime that was the direct result of “Blackberry overtime” while off duty. Allen alleges that he would receive e-mails and one to two calls per day while he was off duty. Due to the nature of his job, these calls and e-mails were not ones that could go unanswered yet the time he spent on them went uncompensated. While the suit was initially filed in 2010, the US District Court (Northern District of Illinois’ Eastern Division) recently allowed Allen to send notice to participate in a class action to other similarly situated employees (those with the rank of Lieutenant and below).

New technologies will continue to change how we work and operate businesses. There are those who debate whether or not the FLSA is an outdated law, but until it changes, the law stands. So what can employers do to protect themselves?

Exempt or Non-exempt Classification

The first course of action is to ensure that all employees are correctly classified as exempt or non-exempt. The FLSA has certain criteria that must be met in order to make these determinations. Each employee should be aware of their classification and understand what that status means in terms of hours worked and their compensation. For those employees who are non-exempt, employers must ensure time tracking processes are firmly in place.

Unauthorized Overtime Policies

Many employers have policies in place to deter employees from working overtime without prior authorization. While the FLSA is clear that all overtime, regardless of authorization, must be paid to any and all non-exempt employees, employers can use these policies to help curb overtime abuse. Organizations that adopt these policies are legally permitted to take disciplinary action including suspension and termination. As in any case of disciplinary action, it is important that the company  implement a consistent and progressive disciplinary process.

For more information regarding FLSA classification or overtime policies, contact C3 Advisors, LLC at kristenh@c3advisors.com.

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