For February 2011, the US Department of Labor’s Wage and Hour Division (“WHD”) reported that it had recovered back wages and assessed penalties against three employers for common violations of the Fair Labor Standards Act (“FLSA”). Below, we have summarized the matters:

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Insurance Company (CT): After conducting 90 employee interviews and reviewing 21,000 employee time and payroll records, the WHD concluded that the insurance company incorrectly classified certain employees as “administratively” exempt from the FLSA overtime requirements. The WHD also found that certain compensation should have been included in the affected employees’ regular rates of pay and various record keeping violations. To qualify for the administrative exemption, all employers must (1) ensure the employee is paid on a salary basis and (2) consider whether the employee’s primary duties require the performance of office or non-manual work that is directly related to the management or general business operations. These employees must exercise discretion and independent judgment with respect to matters of significance.

Grocery Store Chain (TX): The WHD found that the defendants failed to pay the minimum wage and overtime, falsified payroll records, coerced employees to return wages earned and “deliberately misled investigators.” Notwithstanding the employer’s intent to deceive the WHD investigators, all employers are required to maintain accurate payroll records for each non-exempt employee that contain: employee’s full name and social security number, address, sex and occupation, time and day of week in which workweek begins, hours worked each day, total hours worked each workweek, basis for payment (i.e. per hour, per week), regular hourly rate of pay, straight time earnings, total overtime earnings for the workweek, all additions and deductions from wages, total wages paid each pay period and the date of payment and the pay person covered by the payment.

Pizzeria (NY): An investigation by the WHD found that some employees were (1) required to work 70 to 80 hours per week without being paid overtime and (2) paid less than the federal minimum wage for all hours worked. In addition, the employer had no time or payroll records indicating their employee’s work hours, tips, or wages as required by the FLSA. Because restaurants often employ “vulnerable workers” and routinely pay these employees improperly, the WHD has targeted the restaurant and food service industry for its enforcement actions. As a result, any business in the food or food service industry would be well-served to review its wage and recordkeeping compliance position.