Human Resources Consulting - Columbia SC

The Fair Labor Standards Act Strikes Again,
and Again and Again and Again

Approximately 5-6 times each week, I receive emails from several Labor Attorney firms as well as the U.S. Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC) and the National Labor Relations Board (NLRB) on some specific actions taken against employers for violations of various labor and employment laws. Below are 13 examples which were received over the last 21 days of recent violations of one particular federal law known as the Fair Labor Standards Act (FLSA). The fines and penalties range from $27,135 to over $7,200,000. It behooves all large and small employers to understand and be in full compliance with this law. Many employers have, for many years, had basic misconceptions about this statute. Unfortunately, these misconceptions can have a huge negative impact on the bottom line of any organization. The DOL has estimated that approximately 70% of all employers are violating some aspect of this law.

1. A Hawaii company that provides security officers to various public and private facilities, will pay $1,539,773 in back wages and liquidated damages to 171 guards – and civil penalties – after a federal investigation determined the company denied workers overtime pay illegally.

2. Investigators with the department’s Wage and Hour Division (WHD) found that Hang Lung Inc. – operator of H&L Asian Market, a North Charleston business that includes a grocery and restaurant illegally kept all tips left by restaurant customers. H&L also failed to pay employees overtime as required when they worked over 40 hours in a workweek. The employer’s actions violated the Act. The division recovered $154,033 in back wages and liquidated damages for 10 employees.

3. A federal investigation recovered $270,984 in back wages and liquidated damages for 166 workers of a Princeton skilled nursing care facility. The employer failed to pay proper overtime as required by the FLSA.

4. The department’s WHD identified violations in 81 percent of the 71 cotton gin investigations completed between November 2019 and March 2021 in the Southeast, home to some of the largest cotton producers in the nation. These investigations led the department to recover $282,626 in back wages and $10,785 in liquidated damages for 620 workers. The division also assessed $152,539 in civil money penalties to 37 employers.

5. A Southern California Construction Company has paid $72,342 in back wages and liquidated damages to 12 workers after the DOL found the employer failed to pay them overtime wages as required by the FLSA. The department also assessed $8,460 in penalties for the employer’s willful violations.

6. A U.S. DOL investigation found that the owner of a luxury apartment rental property in San Jose’s historic Japantown denied maintenance workers overtime wages, and failed to keep accurate records of employees’ earnings in violation of the FLSA. The division’s investigation led to the recovery of $71,338 in back wages and liquidated damages for seven workers.

7. A U.S. DOL investigation has found a Hawaii flooring contractor misclassified some employees as independent contractors and paid others straight-time wages for all hours when they worked over 40 in a workweek, both violations of the FLSA. The investigation led to the recovery of $57,550 in back wages plus $57,550 in liquidated damages for nine employees, and the assessment of $5,229 in civil money penalties.

8. An investigation by the department’s WHD found HealthPlan Services Inc. – a healthcare benefits management provider – failed to pay employees for time spent setting up their computers and logging in to software applications before the start of their shifts. Additionally, the employer failed to include bonuses in the calculation of overtime pay, which led to the payment of overtime at a rate lower than the law requires. The department recovered $105,200 in back wages for 92 employees. In addition to paying back wages, HealthPlan Services agreed to correct its pay practices company-wide to avoid future violations of the FLSA.

9. A consent judgment entered by the U.S. District Court for the Eastern District of New York ordered Lynbrook Pizza & Pasta Inc., operating as Regina’s Pizzeria and owner Nunzio DiLorenzo to pay $84,160 in back wages and an equal amount of $84,160 in liquidated damages, plus interest, to the affected workers. The court also ordered them to pay $9,679 in civil money penalties assessed by the department due to the violations’ willful nature. The court’s action follows a WHD investigation that concluded Regina’s Pizzeria and DiLorenzo failed to pay certain employees overtime when they worked in excess of 40 hours per week, as required by the FLSA. They also violated the FLSA’s recordkeeping requirements by failing to keep accurate records of work hours and pay rates.

10. Investigators with the U.S. DOL determined that Heritage Village Retirement Center in Holdenville, Henryetta Community Skilled Healthcare & Rehabilitation in Henryetta and Colonial Park Manor in Okemah failed to count on-site and off-site meetings, on-boarding activities, and web-based training as hours worked. When the additional hours resulted in a workweek that exceeded 40 hours, the employer should have paid the overtime rate as the Fair Labor Standards Act requires. The investigation led the division to recover $27,135 in back wages for the affected workers.

11. An investigation by the department’s WHD determined that South Park Country Club Inc. violated the minimum wage, overtime and tipped employee regulations, as well as the recordkeeping and child labor requirements of the FLSA. Investigators found the employer:

  • Required employees to share tips with managers.
  • Computed overtime based on the direct cash wage rather than the full minimum wage.
  • Failed to pay overtime to non exempt workers paid on a salary basis.
  • Failed to include commission payments when computing the overtime rate, which resulted in the employer paying overtime at a lower rate than the law requires.
  • Employed multiple 14 and 15-year-olds for more than 3 hours on a school day or more than 8 hours on a Saturday or Sunday during the school year and past 7 p.m. after Labor Day.
  • Permitted two 15-year old workers to drive golf carts and load or unload golf bags from golf carts, in violation of the FLSA.

12. The department’s WHD found Intermountain Drywall and Acoustical Inc. of Eagle intentionally underpaid its workers by denying them their rightfully overtime wages earned, a FLSA violation. The employer repeatedly told investigators that the company paid employees overtime wages at time-and-one-half their rates of pay when they worked more than 40 hours per week, as the law requires. Investigators determined the employer’s claims were untrue and that the employer had not paid workers overtime as claimed.

The investigation led to the division’s recovery of $110,526 in unpaid overtime wages and an equal amount in liquidated damages for the shortchanged workers. The nature of the violations led the division to assess Intermountain Drywall and Acoustical with $22,560 in civil money penalties.

13. A federal court in Virginia has entered a judgment ordering a Norfolk-based medical staffing agency, which intentionally violated federal laws and denied 1,105 certified nursing aides, licensed practical nurses and registered nurses their rightfully earned overtime wages, to pay more than $7.2 million in back wages and liquidated damages. The employer misclassified employees as independent contractors and failed to pay workers their earned and overtime wages.

A company’s best defense against the potential expense and aggravation related to federal or state law violations is to proactively review and revise as needed all Human Resources policies, handbooks, hiring procedures, compensation, benefits, training programs, communications tools and other functions. The professionals of PHHR are ready to assist your organization with this type of training as well as to maintain compliance with the latest state and federal mandates.

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Paul Hilton, Human Resources Consulting, LLC
Columbia, South Carolina
Office: (803) 481-9533
Cell: (803) 305-8962 

Paul Hilton, Human Resources Consulting, LLC