Court affirms overtime judgment based on estimates and rough calculations

There is an old story about a criminal defendant who shoots his parents and then pleads for mercy from the court because he is an orphan. It didn’t work. In wage and hour litigation, however, a lack of accurate payroll records may be held against an employer and its managing agents even when the employer isn’t at fault. Rather, because it is the employer’s obligation to maintain accurate payroll information, any ambiguity caused by the failure to do so—even when inadvertent—is held against the employer and its managing agents rather than the employee.

In such circumstances, courts may rely on an employee’s reasonable estimate of hours worked and may also apply looser standards to determine the regular rate used to calculate overtime liability. A recent case serves as a timely reminder that employers and their managing agents, rather than employees, must bear the consequences for their failure to meet their recordkeeping obligations.

Facts

Byron Jerry Morales began working as a nonexempt employee for Factor Surfaces LLC, a tile and flooring store, in 2016. Factor Surfaces terminated Morales’ employment in 2018 after Morales asked Factor Surfaces to pay him his overtime wages. In February of 2019, Morales filed a lawsuit against both Factor Surfaces and two individual defendants later determined to be managing agents.