Court ruling could extend 'employer' classification to CEOs
Another powerful reason to maintain proper employee tracking software and records recently came from a decision by the U.S. Court of Appeals for the Second Circuit, which ruled that the CEO of a New York City grocery chain can be held liable for violations of the Fair Labor Standards Act.
Because the business didn't honor repayment obligations put forth in an earlier court ruling on employee overtime, the appeals court determined the company's CEO could be held personally responsible, according to Business Management Daily.
Although the CEO did not have frequent interactions with entry-level employees, nor did he make personnel rulings at that level, the court found that he directly managed people who made decisions relating to employee attendance and overtime.
"Startling in its potential implications, the Second Circuit's decision emphasizes the importance of maintaining compliance with the FLSA's minimum wage and overtime requirements and the risks associated with violations of the statute," wrote New York labor and employment law attorney Andrew Bobreck in Business Management Daily.
Employer obligations, including keeping records of the beginning of the workweek and each employee's total hours worked, are presented on the FLSA website.
Thorough record keeping with web based time and attendance and other methods is an important way to protect the assets of both a company and its CEO.
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