Managers May be Held Personally Liable for Altering Pay Records

If you’re responsible for approving time sheets or signing off on changes to the hours reported by employees, take note: It's not just your organization that risks a big fine and costly litigation. Your personal assets are also at risk, as a new court ruling shows.

The Fair Labor Standards Act allows employees to sue not only their companies, but also their managers, company executives, and HR professionals personally for altering pay records. For the good of their companies and their own peace of mind,  supervisors must not tolerate - or worse, encourage -- off-the-clock work or the altering of employee time records. This includes forcing employees to work through their breaks, but recording them as time off. (For breaks to be unpaid, employees must be completely relieved of their job duties.)

A recent case under the FLSA, Chao v. SelfPride, demonstrates how this personal liability works. A group of “living assistants” (hourly workers) at a home for people with disabilities worked 48-hour weekend shifts and were required to check on each resident every two hours, around the clock. When those employees turned in their time sheets, managers routinely deducted eight hours because each living assistant supposedly got two four-hour breaks. The CEO then signed off on the altered time sheets.

The employees could not leave the building during “breaks” and had to call the main office once an hour. Because the time was not their own to use as they wished, the court said the employees should be compensated. The court also held the CEO personally liable, ordering him and the company to pay more than $500,000 to the employees, including $155,000 as a penalty.  

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