US DOL and State Labor Commissions Target Businesses for Wage and Hour Audits

Low Wage Businesses in the Crosshairs

Posted on 30-Mar-08 by The Timekeeper

As if there weren’t enough news already that the US DOL and state labor boards are focusing on wage and hour violations:

From New York: Forest Hills Physical Therapy PC and one of its corporate officers assessed $74,541 in back pay. According to an announcement by the US DOL, the physical therapy office and a corporate officer, Fern Tobek, must pay an additional civil penalty of $10,285 in addition to the back wages. The issues? The usual: violations of the federal minimum wage, overtime and record-keeping provisions. In other words, they apparently didn’t track employee time accurately, and ended up not paying correct overtime — and in their case, apparently also slipped below minimum wage for some workers.
From Massachusetts: Governor Deval Patrick signs executive order establishing a new task force. The task force is charged with (among other things) educating business owners and employees about the requirements of the law and conducting joint investigations and enforcement actions against violators. They’re also going to be encouraging other businesses and the general public to rat out violators and “enhancing” the available reporting mechanisms.
From New Jersey: Supermarkets and gas stations were targeted for wage and hour investigations. In the first case, two Asian markets were assessed a total of $340,400 in back wages and damages for violations of overtime and recordkeeping provisions. In the second, a small chain of four gas stations was assessed nearly $30,000 for their six hourly employees, again for recordkeeping and overtime violations.

The gas stations chain’s story is fairly typical, unfortunately. They didn’t keep records of the hours their hourly employees worked, and so just paid them all straight time, even when the employees worked more than 40 hours a week.

Problem is, one of the core requirements of the FLSA is that employers must maintain accurate records of employee time worked.

Well, if you’ll pardon my saying so, duh. If you aren’t tracking employee time in the first place, how are you ever going to know when they work overtime so you can pay them properly according to the law?

Look, I work in the industry, so I know this for a fact. Tracking employee time doesn’t have to be expensive or complicated.

You can get electric time recorders or time stamps for less than $200. You can get time and attendance software that will not only record employees’ arrivals and departures, but total up their hours worked and export the data directly to your payroll program for less than $100. Worst case scenario, you can even photocopy time sheets and have employees fill them out for mere pennies apiece. (Of course it’s a less-than-optimal solution, but if you’re really strapped for cash — or a total cheapskate — it’s at least better than nothing.)

Hey, whatever floats your boat, seriously. But if you aren’t tracking your hourly and salaried non-exempt employees’ time, you’d better start. The DOL and state Labor Commissions are seriously cracking down on this. It may be sooner, it may be later, but they will find you out.

If up until now you haven’t been paying at least time and a half for all overtime worked by hourly and non-exempt employees, it might be a bit more expensive to start complying with the law. But it’s going to be a heck of a lot cheaper in the long run to go ahead and start doing that now than to suffer through a DOL audit and pay the back wages anyway, plus additional penalties.

Especially if you’re an employer in a typically low-wage-paying business, which the DOL and several state labor commissions have already said will be especially on their radar in 2008, consider this your fair warning…