Wage & Hour Violations

The Department of Labor estimates that 70% of businesses are in some way not in compliance with the Fair Labor Standards Act (FLSA), and in 2008 alone U.S. businesses paid over $185 million in back wages to over one quarter million employees. The Department of Labor’s Wage and Hour Division (WHD) is responsible for enforcing the FLSA’s minimum wage, overtime, and child labor provisions.

The WHD has the authority to investigate, gather data, and enter to inspect any employer’s place of business.  This includes inspecting records and questioning employees. Record keeping and correct classification is extremely important during these inspections.  An “exempt” employee is exempt from the protections of Federal wage and hour laws, meaning the wage and hour regulations do not apply.

Employers should be aware that non-exempt employees must be paid for all hours worked and must be paid overtime for any hours more than 40 worked in one week. By law, employees must be paid the federal or state minimum wage, whichever is higher, and paid an overtime rate of 1-1/2 times their regular rate of pay.  All businesses need to be compliant regarding regulations of proper documentation in order to be up-to-date with federal laws.   Of all employment lawsuits occurring, those coming from wage and hour issues are currently the most common.

The Department of Labor recently hired an additional 90 investigators, increasing their budget by $244 million to expose more wage and hour violations. These violations are often brought to light from past or current employee complaints regarding wage and hour practices, but more so through having large numbers of low-wage employees.

Stay tuned for the next blog posting:  The most common wage and hour violations made by employers.