As August 2010 comes to a close, a review of the Department of Laborfs (gDOLh) Wage and Hour Division (gWHDh) web page illustrates for all employers the importance of ensuring that non-exempt hourly and nonexempt salaried employees are paid for all hours worked, paid for overtime in excess of 40 hours per week and that accurate time and payroll records are maintained. In a 28-day period, the WHD reported five substantial recoveries:
- A prime contractor and subcontractor agreed to pay $136,679 in back wages to 140 current and former construction employees. The issues: (1) failed to pay overtime and (2) failed to pay two salaried nonexempt employees overtime.
- The DOL recovered $868,443 in back wages for 1,065 time- share company employees. The issues: (1) failed to pay at least the federal minimum wage for all hours worked, (2) failed to include commissions in premium pay, (3) calculated overtime incorrectly and (4) failed to keep accurate time card records.
- An oil and gas equipment maintenance company agreed to pay $232,773 in overtime and back wages to 110 current and former employees. The issues: (1) paid employees straight time for all hours worked, including those in exceeding 40 in a workweek and (2) failed to maintain the required records.
- A home health care provider agreed to pay $150,043 in overtime owed to 144 current and former employees. The issue: failed to pay time and one-half their regular rates of pay for all hours exceeding 40 in a workweek.
- The DOL recovered $433,819 in back wages owed to 69 Walt Disney World employees. The issues: (1) failed to pay employees for work activities occurring before and after their normal shifts, (2) failed to pay employees for working through their meal times and (3) failed to pay employees for working from home.
As the above summaries illustrate, employers across all industries are susceptible to investigations by the Wage and Hour Division. More importantly, the summaries illustrate that employers need to review their employee classifications (exempt v. non-exempt), audit overtime payments, reinforce work hour requirements and ensure that payroll records are properly maintained.
Whether it’s a Wage and Hour Division investigation or a civil lawsuit filed in a state or federal court, the unbudgeted legal fees, potential for substantial recoveries and the hidden costs in terms of time spent by human resource professionals and management is worth a preventive audit. At the very least, all employers should consider conducting a partial audit, reviewing employee adherence to overtime pay policies and ensuring that the company is maintaining the appropriate payroll records.