Wisconsin employers recently received some good news from the Legislature: effective April 17, 2014 employers are no longer required to keep payroll records tracking the “hours worked” of their salaried employees who are “exempt” from Wisconsin’s overtime compensation laws.  This change brings Wisconsin’s payroll recordkeeping requirements in line with those of the Federal Fair Labor Standards Act (“FLSA”). Wisconsin companies no longer have to keep precise daily or weekly time records for their salaried exempt professional, executive (i.e. managerial and supervisory), administrative, and computer professional employees. See Wis. Stats. §104.09.

Employers who previously struggled complying with Wisconsin’s recordkeeping obligations will obviously welcome the lowered administrative burden. But this lower burden may come at a higher price – what if an employee files an overtime pay claim in court or at the Department of Labor (“DOL”) alleging that the employer “misclassified” him/her as overtime exempt?

Often in these cases an employee claims to have worked substantial amounts of overtime hours each week, and offers as “evidence”: (1) a self-serving log or spreadsheet showing a huge number of overtime hours worked; and/or (2) self-serving testimony that he/she worked all hours of the day and night, including weekends. Employers who do not have time cards to refute the claimed amount of overtime hours worked are then forced to rely on anecdotal evidence such as: (1) observations of when the employee “typically” arrived at and/or left work; or (2)  the employee’s computer “log on” and “log off” times.  The DOL or jury then decides how many overtime hours the employee worked each week.

Given this risk, employers would be well served to re-examine whether the employees they classify as “salaried exempt” truly satisfy all of an applicable exemption’s requirements.