Is Your Organization Protected Against FLSA Compliance Challenges?

Most workforce management professionals are well-aware of the Fair Labor Standards Act (FLSA) which governs such well known regulations as minimum wage requirements, overtime compensation, and child labor practices. Many however, may be surprised to learn the FLSA has been the law of the land since it was signed into law by President Franklin Delano Roosevelt way back in 1938. Any law that’s been around as long as the FLSA is sure to have undergone significant revisions, amendments, and modifications. FLSA is no exception. Yet, for many organizations, these changes are either escaping them or being willfully ignored. Here are some examples from just the last week of companies penalized for infractions against FLSA. They all underscore the importance of having proper guidance with regard to labor laws.

First up, a Virginia pizzeria that ran afoul of FLSA regulations governing child labor. While we feel deeply for restaurants, many of which are among the hardest hit operations by the pandemic, this pizzeria tried to keep staffing costs low while also rising to meet the increasing demand for delivery as dining rooms remain restricted. The VA pizza palace employed six 17-year-old minors to work as delivery drivers. The Fair Labor Standards Act prohibits minor employees from driving a motor vehicle to make urgent, time-sensitive deliveries. The resulting civil money penalty of $11,052 was definitely not tasty for this company’s bottom line.

Up next, an Ohio-based healthcare services provider investigators determined had violated the FLSA’s overtime requirements. Paying some employees flat salaries regardless of the number of hours they worked each week was one of several violations identified. Investigators also discovered this organization was neglecting to pay health care employees for time they spent traveling between clients’ locations during the workday as well as failing to include employee bonuses in their calculation when determining workers’ overtime rates. These infractions against the FLSA had negative impact on this company’s financial health to the tune of nearly $328,000 in back wages they had to return to over 225 employees.

The following example is made by a Tampa restaurant chain compelled to return $102,894 in back wages to 11 workers following a federal investigation revealing this employer illegally denied them earned overtime pay under the FLSA. This eatery incorrectly classified cooks and dishwashers as exempt from overtime and instead paid them fixed rate salaries regardless of the hours they worked over the mandate 40 hours. Not a recipe for profit.

Lastly, we check in with a commercial cleaning company in Michigan that was better keeping customers’ places clean than they were at maintaining regulatory hygiene in their workforce management practices. This firm is getting “cleaned out” to the tune of $56,734 in back wages and $51,300 in civil penalties due to their FLSA violations. In this case, damages were reimbursed to 10 temporary foreign workers who provided janitorial services and who the company paid less than the required prevailing wage rate through either a willful or mistaken misinterpretation of the H2-B visa program. The DOL made sure this cleaning company cleaned up its act regarding workforce management regulatory compliance.

The common thread through these four tales of FLSA woes? The critical importance of keeping abreast of the evolving laws and regulations applicable to operations of all sizes and varieties. Are you comfortable in the knowledge that your workforce administrative practices are compliant? Are you willing to risk the possibility they’re not? Maybe check in with nextSource experts to review your workforce management policies and practices to make sure you’re up to date and at minimal risk for penalties and fines.

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