I have defended all manner of class actions, exemption, working time, independent contractor, but this case is a novel twist on that theme. A group of employees is suing a Company and charging it did not properly pay wages and (more importantly) overtime. This alleged lapse resulted from the Kronos Hack of 2021 which impacted the Company’s timekeeping and payroll systems. The case is entitled Jones v. C&D Security Management, Inc. and was filed in federal court in the Eastern District of Pennsylvania.

The lead plaintiff charges that the Company should have implemented a new, accurate system after the hack occurred. He alleges that “Allied Universal could have easily implemented a system to accurately record time and properly pay nonexempt hourly and salaried employees until issues related to the hack were resolved. But it didn’t. Instead, Allied Universal used prior pay periods or reduced payroll estimates to avoid paying wages and proper overtime to these nonexempt hourly and salaried employees.” The allegation is this was a widespread violation of the Fair Labor Standards Act.

The Complaint alleges that the Company “made the economic burden of the Kronos hack fall on frontline workers—average Americans—who rely on the full and timely payment of their wages to make ends meet.” The thrust of the allegations is that since the Company’s computerized tracking of hours was impacted, the Company improperly resorted to estimating or guessing at employee work hours.

In this regard, the Company allegedly paid employees off of their scheduled hours or took work hours from prior pay periods and assumed those were correct for future weeks. The Complaint then asserts that “as a result of Allied Universal’s failure to accurately track the actual hours worked each week, employees who were nonexempt and worked overtime were in many cases paid less than the hours they worked in the workweek, including overtime hours.” A component of the case is the allegation that many employees were not paid at all. Another component is that overtime may have sometimes been paid but was not paid at the required time-and-one-half the hourly rate and/or did not include shift differentials and non-discretionary bonuses.

The Takeaway

The duty to keep accurate time records and records of hours worked is always on the employer and is inviolate. Now, the employer can “shift” the burden to employees by requiring them to prepare their own time records and self-certify that they are accurate. However, I do not believe that the employer can adopt a dog-ate-my-homework defense. The self-certification protocol would have been the appropriate, if not ideal, way to handle this. If not, this case calls out for an early settlement.

Real early…