Labor & Employment Law

Working Time FLSA Class Action Hits Amazon Over Punch In/Punch Outs

By Mark E. Tabakman, Esq.

In what is a troubling trend, an employee of Amazon.com Inc. has filed a FLSA collective action for unpaid overtime. The thrust of the allegations is that the rounding policy, which rounds to the nearest fifteen minutes, violates the Fair Labor Standards Act and deprives employees of compensation for alleged productive working time.   The case is docketed as Austin v. Amazon.com, Inc.

The suit is particularly dangerous because it evidently seeks a nationwide class action of all Amazon 'warehouse associates' who were employed over the past three years. There are facilities in several states, such as Arizona, Delaware and Texas. If certified as a class, there could possibly be more than 21,000 employees involved. The total exposure on such an action could run to the millions of dollars.

Apparently, the Company forbids employees from punching in early; this creates an anomaly because those employees who get to work 'first' get paid for their entire shift, while those who are compelled to wait in line to punch in and do so eight or nine minutes after start time, find their time rounded up to fifteen minutes after the start time and start being paid only from that point on. Under law, if employees punch in and immediately begin productive work, they must be paid from that minute on, without the benefit of rounding.

The situation is complicated due to the advent of electronic timekeeping, including so-called 'smart clocks,' which do not allow employees to punch in before their start times. The plaintiff's attorney called attention to this issue and urged that the electronic technology in fact allowed for payment to the minute, so there was no reason not to properly pay the employees.  He also conceded that some employees could benefit from the policy by deriving some extra minutes from the rounding system, but stressed that the majority of employees would lose money from the rounding procedure.

If the allegations are true, then the actual impact of the policy is that workers work 'off the clock,' depriving them of straight time and overtime wages. I believe this is a real problem in the industrial world and is complicated by the advanced technology of timekeeping. Employees must be paid for all productive work and a timekeeping system cannot act to deprive the employees, of those wages. Employers should institute appropriate policies and, more importantly, must exercise supervisory and managerial oversight to ensure that employees are paid for all hours actually worked.

Full post as published by Wage & Hour - Development & Highlights on December 07, 2009 (boomark / email).