By R. Scott Summers

You may have read an article recently reporting that a court found that a major national retailer owes overtime pay for work performed "off the clock" by employees in 27 stores.

The news reports talk of a possible $50 million price tag for a settlement of similar claims against the same employer in Colorado, and lawsuits have been filed in nearly 30 other states.

You also have probably heard the story of a Chicago woman fired from her job after she was caught working on her lunch break.

Why would an employer fire an employee for seemingly going the extra mile?

Perhaps because experienced human resources professionals and other business people know that these and other issues involving employee pay have become one of the most complex and litigious areas involving employees and employers.

The primary source of wage-and-hour regulation in the United States is the Fair Labor Standards Act, which establishes the minimum wage and 40-hour overtime standard for covered employees.

But the Fair Labor Standards Act does not stand alone in the regulation of wages and hours. Most states also have their own laws regulating wages and hours. An employer must comply with both state and federal laws.

Where the state and federal laws impose different requirements, the employer must follow the standard that is most beneficial to the employee.

So what is "off-the-clock" work?

Working off the clock covers a wide range of activities, both authorized and unauthorized.

For example, it may involve deliberate falsification of time records and coercion of extra, unpaid work.

It may just be a dedicated worker, like the woman in Chicago, who voluntarily works during lunch or after hours to take care of a customer or finish a report.

Or, it may be ignorance of an employer or supervisor as to just what activities must be counted as working time.

Whatever the situation and no matter the size of the company, employers need to know what to be on the lookout for, and understand their obligations in resolving the issues.

Consider these common problem areas:

Pre-clock activities, such as opening the business, donning uniforms or warming up buses

Arriving workers who rush to help customers before clocking in

Working into or through the meal hour

Staying over to finish with a customer

Staying late to clean up or balance accounts

Meetings or training outside normal hours

Stocking or inventory outside normal hours

Time spent on call or standing by if needed

Working at home

All of these activities occur regularly in every workplace and all are generally considered to be compensable work. This is true regardless of whether management requires them or employees perform them voluntarily.

If management knows about the conduct and fails to stop it, the company is liable. It should be noted that not all training or on-call circumstances require compensation.

So, how can employers avoid protracted and messy disputes that may arise from off-the-clock claims?

At a minimum take the following steps:

Establish responsibility for compliance. It is essential there be an individual who possess the necessary skills and is specifically designated to be responsible for wage-and-hour compliance.

Establish and maintain compliant policies and practices. Employers should ensure they have policies and practices in place that assure wage-and-hour compliance.

These policies should be communicated to employees. Employers also should have internal policies and practices in place, including accurate time-keeping systems.

Establish training programs. Having compliant policies and practices in place do not insulate employers from liability if they are not implemented properly. In many areas, managers are on the front lines of ensuring wage-and-hour compliance.

Finally, employees who perform off the clock work deserve compensation for the additional hours they have worked. Pay them and then make a determination as to why it happened.

A dedicated but misguided employee is a much different situation and comes with much less potential damages and negative publicity than a manager telling employees to clock out but continue working.

As always, it is imperative to know and understand all of the regulations that apply to your business at all levels: federal, state and local.

Failure to know and apply these regulations can lead to hefty fines and negative public perception for the company.

Scott Summers is a partner in the Louisville, Ky., office of Dinsmore & Shohl attorneys.