Avoiding DOL Wage & Hour Violations; Learn from recent Case Studies

The U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) enforces [not limited to] federal minimum wage, overtime pay, recordkeeping and child labor requirements of the Fair Labor Standards Act (FLSA). Generally, the WHD will initiate an investigation after a current or former employee files a complaint where they can review up to three years of wage and hour records to determine whether there are any violations in an employer’s payroll practices.

In addition to complaints, the WHD selects certain businesses and industries for investigation. Occasionally, a number of businesses in a specific geographic area will be examined. Recently, the DOL announced an initiative to hire 100 additional WHD investigators, signaling a potential increase in enforcement during 2022. This initiative means now is the time for employers to review their wage and hour practices to ensure compliance with all relevant laws.

"The WHD often targets low-wage industries due to high rates of [egregious] violations, the employment of vulnerable workers, or rapid industry changes, such as growth or decline."

Avoiding Overime Violations

The FLSA requires employers to pay covered nonexempt employees overtime wages if they exceed 40 hours in a workweek. Some companies utilize a variety of tactics to avoid paying these wages, including those that are unlawful.

There is significant importance placed on properly constructed and regularly reviewed workplace policies and manager training, especially when managing employees with nontraditional schedules. Paying experts to review policies prior to their enforcement could save employers tens of thousands of dollars down the line. According to the DOL, employers may also contact the WHD to ensure they understand their responsibilities and avoid similar violations.

FMLA Violations

The FMLA protects workers who need to take a prolonged absence due to a qualified family or medical reason. This law was enacted so that employees wouldn’t need to worry about losing their jobs while dealing with serious, potentially unexpected life circumstances. Yet, an employee can follow all proper procedures, and an untrained or unknowing manager may still violate the law, resulting in costly consequences. FMLA violations can be particularly costly, as they may involve paying back employees’ lost wages.

Employers should ensure managers, employees and other stakeholders understand their FMLA rights. This includes knowing how to submit FMLA requests, understanding situations that might qualify for FMLA leave and comprehending workplace guarantees that come with this leave (e.g., job protection). Understanding these details can help prevent wrongful termination and significant monetary penalties.

Workweek Miscalculations

One of the basic tenets of the FLSA is that work hours must be recorded for covered nonexempt workers and employees must be paid for that time. Yet, that doesn’t always happen, especially when it comes to overtime.

For example, the FLSA’s overtime requirements for health care workers require nonexempt employees to be paid overtime wages after working more than eight hours in a day or 80 hours in a two-week pay period— whichever is greater. Employers must also accurately track working hours to ensure employees are getting paid for the time they work. This includes traveling between worksites and conducting work before or after specified shifts.

Sometimes employee schedules don’t fit neatly into a 40-hour period. When dealing with abnormal schedules, employers must be especially careful while calculating workweeks. Adopting lawyer-reviewed workplace policies and adequately training staff can help prevent potential issues.

In Conclusion

It is extremely important for employers to seek professional guidance before making potentially costly decisions. By learning from past case studies, others in similar industries can avoid major violations and prevent DOL audits.

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