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If You Don’t Keep Time Records, Courts Can Infer The Information

On Behalf of | Jul 16, 2020 | Federal Wage and Hour Violations |

A federal court of appeals has ruled that the Department of Labor can infer workers’ hours from limited information when the employer fails to keep required records. Under the federal Fair Labor Standards Act (FLSA), an employer’s lack of record-keeping can be punished by a lowered standard of proof.

The case involved child labor violations, which is one of the areas covered by the FLSA. Paragon Contractors Corp. was run by a leader of the Fundamentalist Latter-Day Saints (FLDS) Church, a group with fundamentalist beliefs. According to the Labor Department, Paragon unlawfully employed children to harvest pecans without pay.

In 2007, a federal court ruled that Paragon was unlawfully using oppressive child labor. It continued to do so, the DOL says, between 2008 and 2013. In 2015, a court held Paragon in contempt of court.

A CNN report showed hundreds of FLDS children working at the Southern Utah Pecan Ranch harvesting pecans. Witnesses testified that between 200 and 600 kids were forced to work at the ranch.

The issue in the case before the Tenth Circuit Court of Appeals was how much these children were owed in back pay. This was difficult to ascertain because Paragon did not keep any records of the number of children employed, their identities, or how many hours they had worked.

The Labor Department attempted to find out the names of the children and the hours they had worked by sending forms to the members of the notoriously reclusive church. The forms invited the children to say how many days they had worked per week and how many weeks per season.

Only 104 forms were returned, and about half of those lacked key information such as the number of days worked per week or the number of weeks worked per season. Of those that did, most claimed the children had worked six days per week for between two-and-a-half and three months. With this limited information, the Labor Department inferred that the children worked six days a week for 13 weeks.

That worked out to Paragon owing the children $1,012,960.90. The district court ordered Paragon to set up a fund with $812,960.90, less accrued interest, from which the child workers could make claims.

Paragon appealed to the Tenth Circuit. The appeals court held that since Paragon had failed to keep any records, the Labor Department only had the burden of presenting a reasonable initial case of the number of uncompensated hours. Paragon, it ruled, now had the burden of disproving the Labor Department’s conclusions.

If you have questions about the FLSA or the calculation of hours worked, discuss them with an experienced employment law attorney.