The DOL Failed to Pay Overtime
The US Department of Labor (DOL), which is responsible for ensuring that employees are paid correctly, paid $7 million to settle a union’s claim that the DOL had been making employees work overtime without proper compensation.
In a press release about the $7 million settlement, the union president said “You cannot begin to imagine how difficult it was to challenge and then fight the Department of Labor for ten years over its own failure to adhere to these laws and failure to properly compensate its own employees.”
According to a press release issued by the American Federation of Government Employees (AFGE) Local 12, some employees worked “off the clock” overtime and “induced overtime” for years without compensation. An overtime case update on the union’s website says that over 3000 employees are involved in the settlement.
Federal employees have fought for years to be compensated for overtime that is “induced” but not “officially ordered or approved” by employers. Overtime can be induced when employers create an atmosphere in which overtime is expected or when employees are given work that can’t be completed on time unless the employee works extra hours. The “officially ordered or approved” language is a requirement of the Federal Employee Pay Act (FEPA), which was the only labor standard for federal employees until 1974, when some federal employees were included in the Fair Labor Standards Act (FLSA). In general, courts have stated that the “officially ordered or approved” language is intended as a budget-protecting measure to keep federal employers from paying for unexpected overtime.
Induced Overtime Cases
In 1956, in Anderson v. United States, customs border patrol inspectors successfully claimed overtime pay under the FEPA, even without official approval, because they were induced by their supervisors to work overtime. In that case, supervisors encouraged “voluntary overtime” and required inspectors to record their actual hours worked on daily reports that were used to rate and recommend the inspectors for promotions. The Court found that “every administrative device and the tone and content of instructions were so cast as to imply (if not overtly to state)” that the inspectors couldn’t effectively and acceptably perform their work in 40 hours a week.
In 2006, in Doe v. United States, 9000 Department of Justice (DOJ) attorneys didn’t succeed in getting overtime pay. They claimed that the DOJ induced overtime by telling them that they had to work overtime when necessary. In fact, the DOJ’s Manual said that attorneys should “expect to work in excess of regular hours without overtime pay.” In addition, as a New York Times story noted, “the Justice Department ranked the 94 United States Attorneys’ offices according to how many overtime hours were worked in each office each month. The results were distributed to supervisors who exhorted prosecutors, in some cases by name, to log more overtime hours so the office would advance in the rankings.” But a Court rejected the attorneys’ claims, because the attorneys did not receive written orders or approval from the DOJ before performing the work.
More recently, in 2015, nurses working for Department of Veterans Affairs (VA) hospitals wanted overtime under the FEPA because the VA required them to work overtime to deal with “view alerts” about patients. They claimed that the VA knew that “view alerts” required overtime work, because the VA gave nurses laptops and remote access to files so that they could work on these alerts at home, and the system recorded when the nurses logged on to view alerts. The VA argued that under Doe, induced overtime did not qualify as ordered or approved overtime that required overtime pay. But the Court disagreed and sent the case back to the lower court for a decision.
In this DOL case, the employees were covered under the FLSA, not the FEPA. Under the FLSA, employees must be paid for work that an employer “suffered or permitted.” As the DOL states in its FLSA Hours Worked Advisor, “time spent doing work not requested by the employer, but still allowed, is generally hours worked, since the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work being done. This time is commonly referred to as ‘working off the clock.'”
The DOL goes on to say, “It is the duty of management to exercise control and see that work is not performed if the employer does not want it to be performed. An employer cannot sit back and accept the benefits of an employee’s work without considering the time spent to be hours worked.” Instead of trying to benefit from an employee’s unpaid overtime, employers can create a healthy corporate culture that treats employees fairly.
The DOL’s failure to follow its own regulations shows how difficult the issue of overtime can be, particularly in the area of “inducement” and in light of the DOL’s new overtime regulations scheduled to take effect December 1, 2016. Employers should ensure that they follow federal and state laws. No employer is so big that it can avoid its compliance obligations. And if employees work overtime that the employer didn’t know about, the employer must pay for the work. As the DOL noted in a 2014 blog post, Working ‘Off the Clock’ is Not Ok.