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Wage, Hour and Overtime Cases

September 1, 2014

Recently, there have been several violation claims asserted against retailers by the United States Department of Labor (DOL) for violations of the Federal Fair Labor Standards Act (FLSA) resulting in Federal District Court cases.  Substantial civil penalties were imposed against the retailers based on willful and repeated violations.  In one case an employer agreed to pay $2,000,000 in overtime back wages and an additional $1,000,000 in liquidated damages to employees.  The retailer, as part of required corrective action, also, agreed to a 3 year monitoring program for each location the retailer owned/leased to insure compliance with the law.

Involved in the cases were gas station attendants.  The Court noted such persons generally earn low wages, work long hours, often lack English language skills and are unaware of their rights to be paid properly based on law.  Investigation discovered several employees worked up to 84 hours per week without overtime pay, that many were paid partly "off the books" and some in cash to avoid payment of overtime.  The involved retailers did not keep accurate records of hours worked by employees.  "On call time" and "off the clock" time were not included in hours worked/compensation.

As indicated, in one case, the retailer agreed to be supervised for 3 years by an independent monitor who was required to file reports with the DOL with respect to the retailer's compliance.  That retailer was also required to install biometric time clocks.  And post notices for workers regarding the terms of the DOL Settlement Agreement, provide English language training, to adopt an "anti-kickback protection policy" to insure employees were paid owed back wages, and to provide a toll free telephone number for employees to report violations to the independent monitor.

Employers must keep accurate records of employees, their wages, hours worked and other employment conditions.  And comply with payment requirements under wage and hour laws.

These cases are particularly relevant because they deal with employers and employees in businesses similar to those conducted by members of AASP.  Such matters often arise from a disgruntled employee filing a complaint with the DOL.  Every complaint filed results in an investigation.  Investigations are time-consuming and costly and, if they result in legal proceedings, substantial legal fees and costs are incurred.  Employers should be aware of required minimum wages, hours worked over 40 per week and to pay the correct amount due.  Of course, as a further reminder, failure to properly pay hours that result in a complaint causes not only payment of back wages but also the additional obligation to pay applicable Federal, state and local taxes related to such back wages.  And accounting statements and tax returns are required to be amended.

Compliance provides and insures "peace of mind" and less potential substantial cost and expense.

This article was written by Norman P. Zarwin, Esquire and published in the Alliance of Automotive Service Providers of Pennsylvania and Delaware magazine. 




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