The finance department miscommunication that cost this company

A recent court case highlights the costly consequences of a finance department miscommunication.

Accounts Payable and Payroll staffers likely work closely together. They even have some overlapping responsibilities.

But if one group isn’t communicating the right information with the other, it could have costly compliance consequences.

One bank is currently learning that as it defends its actions in court over an employee overtime claim.

The real kicker? If A/P and Payroll had shared info they tracked with each other, this whole mess could have been avoided.

Check out the specifics of this cautionary tale.

Lunch breaks the culprit

Mortgage loan officers for a bank in the Pacific Northwest claimed they deserved overtime for extra hours they were on the clock, including during lunch.

To support their claim, they explained that they were forced to write “8 hours” or “8am to 4pm” on their timesheets, even if they worked more hours than that.

The employer fired back: How could it know whether an employee worked through lunch if that person didn’t record it on his or her timesheet?

A valid defense … except that the bank’s regional managers had approved the loan officers’ expense reports, complete with receipts, showing the employees at business lunches or participating in other work-related activities!

That kept the bank from getting the employees’ overtime claim dismissed.

Preventing costly miscommunications on your watch

It’s easy enough to see how a finance department miscommunication like this can happen.

Every one of your departments is extremely busy with their own responsibilities; they don’t have time to be sharing tons of information all day. Especially with year-end fast approaching.

But as soon as this employer got wind of a possible compliance
claim in the works, it should have reached out to all departments that might know something.

Granted the bank may have had to opened its wallet wider for additional overtime pay. But it would have saved them the expense and hassle of a legal battle.

Make sure that in addition to regular meetings within each finance function that you all touch base as a whole group periodically.

Cite: Bolding v. Banner Bank, C17-0601RSL, U.S. D.C., W.D. Washington, 9/13/21.