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Appellate decision complicates wage and hour complaint defense

The Fair Labor Standards Act (FLSA) requires Georgia employers to pay overtime to hourly employees. On occasion, an employee will file a wage and hour complaint against an employer, claiming that they were not paid the overtime they were due. Up until recently, companies that found themselves defending against lawsuits filed by employees after leaving an employer -- whether they left voluntarily or were terminated -- could raise the defense that the employee should have brought the discrepancy in pay to the company's attention prior to leaving.

A recent decision from the U.S. Court of Appeals for the 11th Circuit could make using that defense more difficult. A former employee of a company called TitleMax claimed he was not properly paid overtime during the year he worked there. He further claimed that his supervisor ordered him to under-report his hours.

Company policy stipulates that employees are responsible for verifying the hours they worked and reporting any issues to a member of management, which the man failed to do even though he was aware of the policy. The company raised this issue as a defense to the lawsuit, and the U.S. District Court for the Northern District of Georgia agreed and dismissed the case. On appeal, that decision was reversed because of the supervisor's actions.

This decision does not bar a Georgia company from using this defense. However, if it is determined that a supervisor or manager knew that an employee failed to report all of his or her work hours, the company may not be able to use this defense. Therefore, it is important that companies keep tabs on their managers and supervisors to be sure that they are not encouraging employees to not report their total hours worked, because it could open up the company to liability under the FLSA in a wage and hour complaint.

Source: hr.blr.com, "FLSA: Court limits Georgia employers' defenses against claims", Raanon Gal, March 12, 2015

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