Disregarding FLSA compliance can cost your company big

by on March 31, 2009 · 0 Comment POSTED IN: HR Info Center

DOL catches exempt employee misclassification

You don’t want to be the person on whose watch an exempt job turns out to be non-exempt. That’s why it’s a good idea to make sure you’re in FLSA compliance. Take a close look at your administrative exemptions – before the DOL does.

A major retailer improperly classified a job known as “club personnel manager” as exempt employee. Club personnel managers perform clerical functions such as entering employee work schedules into the computer, answering employees’ questions about benefits and reviewing job applications for completeness.

A DOL audit determined this position didn’t qualify for an administrative exemption. The position made no independent decisions, they didn’t set strategies and they weren’t involved in the company’s general management.

The employer paid $320,000 in overtime wages to 233 workers.

Cite: DOL v. BJ’s Wholesale Club, Inc

Employer blew off FLSA compliance

Just because a worker gets a straight weekly salary – instead of hourly pay – doesn’t mean she’s not protected by overtime laws.

A Wage and Hour Division investigation found assembly workers who were paid by the week had been denied overtime pay. The employer had classified them as salaried, exempt employees. But the DOL – which wasn’t swayed by the straight weekly salary argument – disagreed.

The employer paid $354,950 in back wages to 62 workers.

Cite: DOL v. Marley Cooling Technologies

Employer made bad call on FLSA compliance and it cost her big.

Some bosses believe the DOL needs probable cause, or even a search warrant, to examine payroll records. They’re wrong. The agency has far more latitude than the police.

DOL arrived unannounced at a nursing home after an employee notified DOL that an administrator failed to pay workers overtime.

Inspectors uncovered fudged payroll records and went after the employer in court.

The owners reached a settlement: They agreed to pay 66 workers $37,500 in overtime comp, plus more than $37,000 in damages and fines.

Cite: DOL v. The Judith Lynn Home.

No waiving overtime for non-exempt employees

Non-exempt hourly employees can’t waive their right to overtime, regardless of how much money they make per hour or how good the benefits are.

An investigation by the DOL’s Wage and Hour Division found that registered nurses were being paid straight time for hours worked over 40 per week. The investigation also found that the nurses had signed agreements waiving overtime – presumably in exchange for competitive hourly wages. The nurses didn’t complain, but the DOL cried foul and ordered the employer to pay 36 RNs $218,959 in overtime back pay.

Remember, the FLSA compliance requires payment of time and one half an employee’s regular rate of pay after 40 hours worked in a workweek.

Cite: DOL v. CritiCare, LLC.

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