Human Resources News & Insights

Employer tried to get cute – and feds hit it with double damages

An Ohio company thought it had hit on a way to put one over on Uncle Sam when it came to complying with the Fair Labor Standards Act (FLSA). But things didn’t quite work out.

Cincinnati-based Hamilton Avenue Animal Hospital paid 21 animal handlers the full amount of compensation that was owed to them — including overtime pay — but then required the workers to give back the overtime portion in cash.

The hospital then falsified payroll records to show that proper overtime wages had been paid, according to a report from the Department of Labor (DOL).

‘Who are they going to tell?’

Many of the workers did not speak English, which may have given the hospital a false sense of security that they wouldn’t speak up about the shady pay practices.

But when two advocacy groups — the Cincinnati Interfaith Workers Center and Su Casa Hispanic Ministry — caught wind of what was going on, they referred the workers to the DOL’s Wage and Hour Division.

After an investigation, the DOL filed a petition in U.S. district court in Cincinnati seeking to recover the following from the hospital:

  • $42,628 in back overtime wages for the 21 workers
  • $23,100 in civil penalties for willful violations of the FLSA, and
  • another $42,628 in liquidated damages.

Why another $42K? Under the FLSA, employers who violate the act by not paying overtime may be held liable for double damages.

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Comments

  1. Talk about a case of epic employer stupidity. What was this place possibly thinking?

  2. They got off cheap. I hope the bad press they’ve gotten for this puts this place out of business. Disgusting.

  3. Just think… There are actually people, HR folks among them, who believe unions are not necessary because there are so many laws that “protect” employees. I am not commenting on the pros or cons of unions, but I am infuriated by anyone imagining that the laws effectively and timely protect employees. These cases are written about over and over on Wage & Hour, FMLA, retaliation, sexual harassment, discrimination, etc. Despite the publicity, there is never a shortage of yet more stories of companies that either overtly or covertly harm employees by breaking the laws.

    For Matt: You ask what the company was thinking. Clearly they were thinking that they were getting away with underpaying their employees and how much money it was saving them. Sure, there are laws, but how long did it take to get the unpaid monies back to the employees? Lauren is right. They got off cheap. My unwavering advice to my employer clients that it is far less expensive and spreads loads of goodwill to treat employees fairly. If being fair sticks in their throats, I have a decision to make: Get them to at least follow the laws or consider my contract with them breached.

    The struggles I routinely deal with are beyond ridiculous. The need for strong and well-educated HR, working for companies that will support and respect the many ways we try to protect everyone, will apparently continue ad infinitum. Job security, right? But Is that good or bad?

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