CAUTION! WATCH OUT FOR THESE WAGE-AND-HOUR PITFALLS
The U.S. Department of Labor has been cracking down on wage and hour infractions, and it may be time to review your overtime procedures and policies–it is all too easy to violate wage and hour regulations unwittingly.
Sometimes DOL complaints seem trivial. We lawyers have a saying–the “de minims” rule, which says “some things are too trivial to merit consideration.”
But here’s the point: To the Department of Labor, NOTHING IS TRIVIAL.
Below are some typical scenarios where employers recently paid heavy fines.
Scenario One: Salinas, Inc. A janitorial service general contractor, was fined a total of $342,856 for failing to pay overtime to 22 field workers over a two-year period. The field workers–plumbers, carpet-cleaners, painters, etc. were paid a fixed semi-monthly salary regardless of the number of hours worked, and in addition, they were also paid another flat-fee for service calls. Furthermore, the Department found that Salinas was in violation of record-keeping requirements.
Scenario Two: Athens Rehab and Senior Care paid $165,000 in back wages and damages. Athens used a time-clock system, though it required employees to report for work prior to the beginning of their shifts–their “punch-in” time. Employees were not compensated for time prior to the beginning of their shifts.
Additionally, the department found that two salaried maintenance workers were incorrectly classified as “exempt” from overtime.
Scenario three: Grassroots Kitchen and Tap (and two affiliated food service businesses) paid $105,000 in back wages and damages. Here the employees would work at more than one location in any given week. The company paid them on separate checks for each location. The employer failed to combine the hours worked to determine their eligibility to be paid overtime.
Scenario Four: Citgo Petroleum Corporation paid $460,000 in overtime back wages. After finishing their 12 hour shifts, refinery workers spent an average of fifteen minutes briefing incoming workers on the next shift, They were not compensated for this time.
Scenario Five: DCI/Shires, a construction and excavation Company paid $105,000 in back wages, damages, and penalties. In this case the DOL press release describing the case is vague regarding the precise nature of the violation, but it did find that the company failed to keep adequate time records, and that they “obstructed the investigation,” not specifying the exact nature of the “obstruction.” But it’s good to always bear in mind that the DOL holds vast power over businesses–the power of life and death. So, while “obstructed the investigation” sounds a little v vague, it’s not a bad idea to appear cooperative.
George has been selected for the 12th time as a Super Lawyer in a vote by other Illinois lawyers. This recognition is for his work in the field of business litigation. Congratulations, Geo!