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FLSA Compliance Means Paying
Employees Fairly |
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The Fair Labor Standards Act of 1938 (FLSA) provides for minimum standards for both wages and overtime entitlement, and spells out administrative procedures by which workers must be compensated for work time. Workers covered by the FLSA are entitled to minimum wage and overtime pay at a rate of one and a half times their regular rate of pay after 40 hours of work in a workweek (overtime is paid by the week, not the day).
FLSA compliance violations cost U.S. companies millions of dollars each year. From 2002 to 2003, 314,660 employees collected monetary awards—a 30% increase. FLSA cases constitute about 83% of all cases handled by the Department of Labor in a fiscal year.
To be in compliance with FLSA, employers must retain records of employees' earnings for three years. Records should include each employee's information, such as name, address, job title, hours and days worked, amounts earned each day or week, regular hourly pay rate, total overtime pay for the week, deductions or additions, total wages paid for the pay period, and dates wages are paid. |
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| Dangers in Violating FLSA |
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| Employers who willfully or repeatedly violate FLSA regulations are subject to civil monetary penalties: |
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| VIOLATION |
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PENALTY |
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| • Minimum wage or overtime pay |
Up to $1,000 per violation |
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| • Child labor provisions |
Up to $10,000 per young worker |
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| • Willful violations |
Criminal prosecution and fine up to $10,000 |
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| • Second conviction |
Possible imprisonment |
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There is also the possibility of violation of state wage payment laws, which usually carry their own penalties, fines, and attorney’s fee awards.
For more information about FLSA compliance, click here to download a free HR compliance report. |
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The Fourth District Court of Appeal in California ruled in late July that employers are not responsible for ensuring that employees take their meal and rest breaks, and that employers cannot be held accountable if employees work off the clock unless managers are aware of the practice. The ruling involved Brinker Restaurant Corp.’s policies regarding meal and rest breaks. Brinker operates more than 100 restaurants in California, such as Chili’s, Romano’s Macaroni Grill, and Maggiano’s Little Italy.
The U.S. Department of Labor released an opinion letter in late July stating that employers are obligated to pay employees for all hours worked, even if they work voluntarily through their meal breaks. Monty Navarro, DoL Office of Enforcement Policy, Fair Labor Standards Team, stated that the time worked through the missed meal break should be considered as hours worked in determining overtime compensation.
In August, a suit was filed in California against Apple Inc. alleging that IT workers “are subject to conditions resembling indentured servitude” and misclassified as management to avoid paying overtime rates and to avoid lawsuits. The former network engineer who brought the suit claims he was continually forced to work overtime, miss meal benefits, and be on call at night and on weekends without additional pay. His attorneys are requesting class status for all of Apple’s California IT employees. |
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