Recently, the U.S. Department of Labor (“DOL”) sued a New Hampshire painting and construction company and its president, vice-president and treasurer in their individual capacities to recover unpaid wages and liquidated damages for 57 employees. (Solis v. Kevin Corriveau Painting, Inc., et al., New Hampshire, 1:12- cv00356-PB).

The DOL’s complaint alleges that the company and its three officers willfully and repeatedly violated the Fair Labor Standards Act (the “Act”) by (1) paying employees at rates less than the minimum wage, (2) failing to pay employees for all hours worked, (3) failing to pay for overtime at rates not less than one and one-half time each employee’s regular rate of pay, and (4) failing to make, keep and preserve adequate and accurate records of employees’ wages, hours and other conditions of employment.

With respect to the overtime hours worked, the DOL alleges that the company paid employees their regularly hourly rate for the first 40 hours worked and a lump-sum payment for some or all of the overtime hours worked at their regular hourly rate, made separate off-payroll cash or check payments for some or all of the overtime worked and/or banked overtime hours in a workweek which were paid in subsequent workweeks at the regular hourly rate. With regards to the required payroll records, employees were instructed by management to alter or revise their payroll records to reflect only non-overtime hours worked. The DOL is seeking a judgment to permanently enjoin the company from violating the minimum wage and overtime requirements, all unpaid back wages for the employees, an equal amount as liquidated damages and its costs in pursuing this litigation.

Based on these facts, it is important for all employers to understand the federal and state specific minimum wage and overtime pay requirements. In addition, all company decision makers should understand that the courts have generally interpreted the term “employer” very broadly, which enables both current and former employees to sue company decision makers in their individual capacity in wage and hour lawsuits. The ability to sue the president, vice-president, treasurer, controller, human resource manager, etc. on an individual basis creates personal liability for any back wages, liquidated damages, costs and/or plaintiffs’ attorney fees for these individuals, as well as, a searchable public record that may surface in a future credit rating or background check. As a result, we recommend that all company decision makers review the company’s payroll practices in order to minimize the risks of large judgments against the company and to protect themselves from personal liability.