I often write about court cases or Department of Labor (DOL) actions where an employer has done something to violate the Fair Labor Standards Act (FLSA). While sometimes it’s obvious an unscrupulous employer has been taking advantage of unsophisticated employees, in many cases the violations are clearly inadvertent. With laws as complex as ours, it’s not surprising employers occasionally get tripped up.
But sometimes, you just have to wonder “what were they thinking?!” I mean, seriously. I try to give employers the benefit of the doubt. But occasionally I come across a case where the company was doing so many things wrong I have to wonder if they could really be that clueless, or was it deliberate?
Take, for instance, the case of the Doubletree Hotel in Richardson, Texas. The franchise company that owns that property recently agreed to pay 112 employees a total of $102,592 to settle charges of FLSA violations. A DOL investigation revealed hotel management:
- Failed to compensate workers for time performed before or after their scheduled shift times.
- Deducted wages for lunch breaks regardless of whether the workers actually got a lunch break or not.
- Paid straight time for all hours worked, instead of paying time-and-a-half for overtime hours.
- Classified non-exempt workers as exempt to avoid paying overtime in the first place.
- Improperly rounded off time so that employees didn’t get paid for all their work time.
- Improperly calculated employees “regular rate of pay” for overtime, by failing to include bonuses.
- Failed to maintain proper FLSA-mandated records of employee wages and work hours.
At this point, I’m frankly wondering if there was, in fact, anything they did right. What makes it worse: the DOL has very publicly had the hospitality industry and other low-wage industries in their cross-hairs for several years now. They have given ample warning, on many occasions, that this is an area they’re focusing on in great detail. So it just boggles my mind that anyone in that industry would stray that far off the mark when it comes to complying with the law. The owners might as well have painted a giant glowing target on the side of the building.
You’ve heard me say before (and I will doubtless say it again), it pays to consult with your employment law advisor on a regular basis. A simple wage and hour audit by their attorney would doubtless have turned up all these violations so they could have been fixed long before the DOL came calling. Being confused by wage and hour law is understandable; failing to consult with an expert to clear up that confusion is not.
When was the last time your company conducted a wage and hour audit?