The Fair Labor Standards Act can be a veritable legal liability minefield for the uninitiated. Just ask several of my friends who practice law on the plaintiff’s side. Heck, it can put an employment lawyer’s kids through college, no matter on which side of the “v” they practice. 😏
Last night, I read a news release from the U.S. Department of Labor that helps put this into perspective.
The department’s Wage and Hour Division (WHD) announced a seven-figure resolution for unpaid wages and penalties.
And that doesn’t include whatever the employer had to pay its lawyers to defend it.
According to the release, the company and its owner signed a consent order that requires them to pay approximately $1.6 million in back wages and liquidated damages to 288 workers deliberately denied overtime pay.
The WHD claims that its pre-litigation investigation uncovered several hornbook violations.
For example, covered employees must receive overtime pay for hours worked more than 40 in a workweek of at least one and one-half times their regular rates of pay. In this case, the WHD alleged that employees were paid at their regular rates of pay for all hours worked, even when they worked more than 40 in a workweek.
Another pitfall is employees working different jobs (sometimes at different rates) for different customers or clients. An employer must aggregate that time and pay for wage and hour purposes if the work occurs in the same workweek. Here, the defendants did not combine hours between multiple clients for overtime calculation purposes.
Under the FLSA, an employee’s time spent traveling as part of their principal activity (other than their normal commute), such as travel from job site to job site during the workday, is work time, and the employer must count it as hours worked. Here, employees did not receive pay for time spent traveling between clients’ homes in the same workday.
The FLSA also has several recordkeeping requirements. The WHD claims that the employer maintained inaccurate records of hours worked due to not tracking hours for travel time and kept zero payroll records for part of the investigation period.
Also, defendants (plural) isn’t a typo. (There are many in this blog, but that’s not one of them.) The FLSA’s definition of “employer” is broad enough to include individuals who exercise or have sufficient control over the conditions and terms of a worker’s employment. So, a plaintiff-employee can name both the employer and a supervisor, HR professional, owner, etc., as a defendant, too.
If you need a little FLSA 101 for your business, check out this WHD resource. Or better yet, since an ounce of prevention is worth a pound of cure, call your employment lawyer.