How expensive is an overtime settlement with the Labor Department?
On July 31, 2017 the U.S. Department of Labor (DOL) issued a press release about a recent FLSA settlement involving overtime claims.The DOL previously investigated the employer. Florida employers are reminded that once you get on the DOL’s radar, they will come back and check on you again. That is what happened in this case.
Over several years, the DOL returned twice to investigate and determined that the employer failed to comply with the FLSA’s overtime and recordkeeping requirements. Specifically the DOL determined that the company failed to record all the hours employees had worked, and failed to pay them overtime at time-and-one-half when they worked more than 40 hours in a week. The Wage Hour Division of the DOL found the recent violations to be willful, because the company was previously investigated. Essentially, the employer was held to a higher standard because it should have learned its lesson from the previous DOL investigations. Because the DOL determined that the violations were “willful,” they demanded that the settlement agreement cover back wages for the workers who earned them – going back three years, instead of two years. Acosta v. Tavco Auburn St., Inc. et al, CA No. 4:17-CV-40070.
To make matters worse, unlike a situation where a lawyer sues on behalf of one employee who was not paid overtime, the DOL widened the scope and made the employer pay back unpaid overtime for groups of employees at various location! In total, the DOL forced the employer to settle by paying $292,016 in back wages and an equal amount in damages, totaling $584,000.
The employer was alleged to have regularly paid employees the regular rate (but not the additional half-time premium) for overtime hours worked. The DOL also claimed that the employer failed to keep accurate records of wage payments to employees - certain employees received a portion of their wages in cash and the employer failed to keep records of those cash payments
A DOL spokesperson was quoted as saying, “[u]nfortunately, overtime and recordkeeping violations are not uncommon.” However, that did not prevent the DOL from widening the group of employees they looked into, and it did not prevent the DOL seeking backpay and double damages for a third year, rather than just two years.
If you need any assistance in handling FLSA matters or addressing exemptions under the FLSA for overtime or minimum wage concerning your Florida business, please promptly email or call the Law Office of David Miklas, P.A. at 1-772-465-5111.
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