ICYMI, the days of a more business-friendly U.S. Department of Labor are long gone.
And it’s only going to become more adversarial.
In the past year, the DOL has ended a program that would have allowed employers to self-report federal minimum wage and overtime violations under the Fair Labor Standards Act to avoid litigation, penalties, or damages. Then, it rescinded a narrow joint employer rule. The DOL has also withdrawn several opinion letters and hasn’t issued any new ones during this administration. Opinion letters help employers proactively avoid wage and hour violations.
Instead, the focus now is on enforcement.
Why in just the past week, the DOL announced that it had recovered $117,718 in back wages and liquidated damages for 33 workers after their employer “recklessly denied them overtime wages they earned.” The agency also won a judgment of nearly $3M against an employer who denied more than $1.4 million in wages to hundreds of home care workers. (The rest is liquidated damages and civil money penalties.) And how about the retailer that must pay $50,000 in punitive damages to one worker terminated after asking for owed overtime wages?
And the DOL is backing this string of wins by announcing that it will hire 100 more wage and hour investigators.
Their responsibilities include the following:
- Conducting investigations to determine if employers pay workers and afford them their rights as the law requires.
- Helping ensure that law-abiding employers are not undercut by employers who violate the law.
- Promoting compliance through outreach and public education initiatives.
- Supporting efforts to combat worker retaliation and worker misclassification as independent contractors.
So, what does this mean for your business? Many pitfalls could have one of these newly-minted investigators darkening your door. Here are three:
- Employee misclassification. Do you have independent contractors? Are you sure? Just because you call someone an independent contractor doesn’t necessarily make it so. Misclassifying an employee as an independent contractor can lead to a slew of wage and hour violations, including failing to pay overtime when they work more than 40 hours in a workweek. The same applies to non-exempt employees whom you’ve misclassified as exempt from the FLSA’s overtime requirements.
- Poor recordkeeping. The FLSA has specific recordkeeping requirements for each non-exempt worker, including the times and types of records that your business must keep. If you’re not compliant, odds are, one of the investigators will find the violation.
- Yes, the FLSA likely covers your business. The FLSA covers businesses that do $500K in annual dollar volume of sales or business. That’s called enterprise coverage. Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between States. The FLSA covers individual workers who are “engaged in commerce or in the production of goods for commerce.”
Your business can avoid these issues and other FLSA headaches by auditing your pay practices. An excellent outside employment law attorney will have checklists and experience helping clients get their houses in order.
I happen to know a very handsome one with a killer ‘stache.
Or, instead of being proactive, you can delay. After all, this isn’t communist Russia. Your business has the choice … to wait until the DOL gets involved or a class of employees sues. Personally, I prefer to buy flood insurance before the storm.
But you be you.