Problems with overtime law have a long term cost

by on March 30, 2009 · 0 Comment POSTED IN: HR Info Center

Legal blunders with overtime law have a financial and opportunity cost

Overtime law blunder costs 49K

Wage and Hour investigators determined that an auto-parts business had failed to include bonuses and commissions when computing a basis for overtime pay. And it mistakenly believed that salaried employees were exempt from overtime pay.

Investigators found that employees under age 18 regularly drove vehicles. That’s a violation of child-labor laws. The employer agreed to pay $42,815 in back overtime wages to 36 employees as well as a $6,480 fine for violating child-labor laws.

Cite: DOL v. Napa Auto Parts.

Nailed for overtime law violations

Some FLSA compliance violations occur due to inadvertent misclassification of (exempt v. nonexempt) jobs, and others are a simple matter of inept recordkeeping.

But when employers knowingly cheat workers out of the overtime pay they deserve, they’ll face hefty civil penalties as well, and not just under Federal law.

A Massachusetts landscaping contractor apparently thought it could get away with paying four low-wage laborers fixed salaries, even though they worked up to 72 hours a week.

The workers complained to the state’s attorney general’s office. An investigation conducted by the state concluded the landscaper owed the four workers $21,000 in overtime pay.

Plus, the employer was ordered to pay a civil penalty of $4,070 for failing to keep true and accurate payroll records and for not providing proper pay stubs.

Cite: Commonwealth of Massachusetts v. P&C Landscape Contractors.


A maker of NASCAR race cars didn’t keep pace with overtime law, and now owes $352,000 in back overtime.

DOL said 214 salaried production workers of the Charlotte, NC, company didn’t get overtime for working more than 40 hours a week over a two-year period.

Cite: DOL v. Hendricks Motorsport


A business unit of Hertz, the car rental company, had to pay $320,000 in back overtime because it didn’t include commissions when calculating overtime wages.

The company did a FLSA compliance audit under DOL supervision. It found that overtime pay for 834 assistant branch managers around the country had been figured without the commissions.

Cite: DOL v. Hertz Local Edition Corp.

At-home transcribers were due overtime, says FLSA regulations

Medical transcribers for a Texas firm may have worked at home, but they weren’t independent contractors.

DOL ruled that the transcribers were due overtime that they hadn’t received. The employer paid them either straight wages or $10 an hour for hours over 40 in a week.

The employer anted up $118,406 in back overtime.

Cite: DOL v. Medrecon Ltd

FLSA overtime law is still in effect during emergencies

A business emergency is no excuse for failing to pay overtime, as a Florida hospital chain found out.

Employees were ordered to remain at seven hospitals each time hurricanes approached the area.

But the employer neglected overtime regulations that apply when workers have to stay on site for 24-hour periods. DOL investigated, and the hospital chain ended up paying $1.9 million in back overtime to more than 9,000 employees.

Cite: DOL v. Florida Hospital South.

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