The Fair Labor Standards Act
Strikes Again,
and Again and Again and Again
Approximately 5-6 times each week, I receive emails from several
Labor Attorney firms as well as the U.S. Department of Labor
(DOL), the Equal Employment Opportunity Commission (EEOC) and
the National Labor Relations Board (NLRB) on some specific actions
taken against employers for violations of various labor and employment
laws. Below are 13 examples which were received over the last
21 days of recent violations of one particular federal law known
as the Fair Labor Standards Act (FLSA). The fines and penalties
range from $27,135 to over $7,200,000. It behooves all large
and small employers to understand and be in full compliance with
this law. Many employers have, for many years, had basic misconceptions
about this statute. Unfortunately, these misconceptions can have
a huge negative impact on the bottom line of any organization.
The DOL has estimated that approximately 70% of all employers
are violating some aspect of this law.
1. A Hawaii company that provides security officers to various
public and private facilities, will pay $1,539,773 in back wages
and liquidated damages to 171 guards – and civil penalties – after
a federal investigation determined the company denied workers
overtime pay illegally.
2. Investigators with the department’s Wage and Hour Division
(WHD) found that Hang Lung Inc. – operator of H&L Asian
Market, a North Charleston business that includes a grocery and
restaurant illegally kept all tips left
by restaurant customers. H&L also failed
to pay employees overtime as required when they worked over 40
hours in a workweek. The employer’s
actions violated the Act. The division recovered $154,033 in
back wages and liquidated damages for 10 employees.
3. A federal investigation recovered $270,984 in back wages
and liquidated damages for 166 workers of a Princeton skilled
nursing care facility. The employer failed to pay proper overtime
as required by the FLSA.
4. The department’s WHD identified violations in 81 percent
of the 71 cotton gin investigations completed between November
2019 and March 2021 in the Southeast, home to some of the largest
cotton producers in the nation. These investigations led the
department to recover $282,626 in back wages and $10,785 in liquidated
damages for 620 workers. The division also assessed $152,539
in civil money penalties to 37 employers.
5. A Southern California Construction Company has paid $72,342
in back wages and liquidated damages to 12 workers after the
DOL found the employer failed to pay them
overtime wages as required by the FLSA. The department also assessed $8,460 in penalties
for the employer’s willful violations.
6. A U.S. DOL investigation found that the owner of a luxury
apartment rental property in San Jose’s historic Japantown
denied maintenance workers overtime wages,
and failed to keep accurate records of employees’ earnings
in violation of the FLSA. The division’s investigation led to the recovery
of $71,338 in back wages and liquidated damages for seven workers.
7. A U.S. DOL investigation has found a Hawaii flooring contractor
misclassified some employees as independent contractors and paid
others straight-time wages for all hours when they worked over
40 in a workweek, both violations of the FLSA. The investigation
led to the recovery of $57,550 in back wages plus $57,550 in
liquidated damages for nine employees, and the assessment of
$5,229 in civil money penalties.
8. An investigation by the department’s WHD found HealthPlan
Services Inc. – a healthcare benefits management provider – failed
to pay employees for time spent setting up their computers and
logging in to software applications before the start of their
shifts. Additionally, the employer failed to include bonuses
in the calculation of overtime pay, which led to the payment
of overtime at a rate lower than the law requires. The department
recovered $105,200 in back wages for 92 employees. In addition
to paying back wages, HealthPlan Services agreed to correct its
pay practices company-wide to avoid future violations of the
FLSA.
9. A consent judgment entered by the U.S. District Court for
the Eastern District of New York ordered Lynbrook Pizza & Pasta
Inc., operating as Regina’s Pizzeria and owner Nunzio DiLorenzo
to pay $84,160 in back wages and an equal amount of $84,160 in
liquidated damages, plus interest, to the affected workers. The
court also ordered them to pay $9,679 in civil money penalties
assessed by the department due to the violations’ willful
nature. The court’s action follows a WHD investigation
that concluded Regina’s Pizzeria and DiLorenzo failed
to pay certain employees overtime when they worked in excess
of 40 hours per week, as required by the FLSA. They also violated
the FLSA’s recordkeeping requirements by failing to keep
accurate records of work hours and pay rates.
10. Investigators with the U.S. DOL determined that Heritage
Village Retirement Center in Holdenville, Henryetta Community
Skilled Healthcare & Rehabilitation in Henryetta and Colonial
Park Manor in Okemah failed to count on-site
and off-site meetings, on-boarding activities, and web-based
training as hours worked. When the additional hours resulted in a workweek that exceeded
40 hours, the employer should have paid the overtime rate as
the Fair Labor Standards Act requires. The investigation led
the division to recover $27,135 in back wages for the affected
workers.
11. An investigation by the department’s WHD determined
that South Park Country Club Inc. violated the minimum wage,
overtime and tipped employee regulations, as well as the recordkeeping
and child labor requirements of the FLSA. Investigators found
the employer:
- Required employees to share tips with managers.
- Computed overtime
based on the direct cash wage rather than the full minimum
wage.
- Failed
to pay overtime to non exempt workers paid on a salary basis.
- Failed
to include commission payments when computing the overtime
rate, which resulted in the employer paying overtime at a lower
rate than the law requires.
- Employed multiple 14 and 15-year-olds for
more than 3 hours on a school day or more than 8 hours on a
Saturday or Sunday during the school year and past 7 p.m. after
Labor Day.
- Permitted two 15-year old workers to drive golf
carts and load or unload golf bags from golf carts, in violation
of the FLSA.
12. The department’s WHD found Intermountain
Drywall and Acoustical Inc. of Eagle intentionally underpaid
its workers by denying them their rightfully
overtime wages earned, a FLSA violation. The employer repeatedly told investigators
that the company paid employees overtime wages at time-and-one-half
their rates of pay when they worked more than 40 hours per
week, as the law requires. Investigators determined the employer’s
claims were untrue and that the employer had not paid workers
overtime as claimed.
The investigation led to the division’s recovery of $110,526
in unpaid overtime wages and an equal amount in liquidated damages
for the shortchanged workers. The nature of the violations led
the division to assess Intermountain Drywall and Acoustical with
$22,560 in civil money penalties.
13. A federal court in Virginia has entered a judgment ordering
a Norfolk-based medical staffing agency, which intentionally
violated federal laws and denied 1,105 certified nursing aides,
licensed practical nurses and registered nurses their rightfully
earned overtime wages, to pay more than $7.2 million in back
wages and liquidated damages. The employer misclassified employees
as independent contractors and failed to pay workers their earned
and overtime wages.
A company’s best defense against
the potential expense and aggravation related to federal or
state law violations is to proactively review and revise as
needed all Human Resources policies, handbooks, hiring procedures,
compensation, benefits, training programs, communications tools
and other functions. The professionals of PHHR are ready to
assist your organization with this type of training as well
as to maintain compliance with the latest state and federal
mandates.
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