By now, everybody’s aware that the feds are cracking down on wage-and-hour violations. What they may not know: Individuals — even HR managers — can be held personally liable for willful violations of the FLSA.
If you ever need ammunition in the argument for conducting an FLSA audit on your workforce, here it is.
Fair Labor Standards Act violations can carry penalties including back pay, interest, attorneys’ fees, court costs and liquidated damages.
The FLSA also allows for claims against individuals like corporate officers and supervisors for “willful” breaches of the law. And those individuals can face fines of up to $10,000 per violation and jail time for a second conviction.
Where firms go wrong
Here’s a look at some of the most common mistakes employees make in interpreting the FLSA:
- They assume because employees are paid on a salary basis, they’re not entitled to overtime. Being salaried doesn’t mean an employee’s exempt. The salary test is merely the first step in deciding whether or not a worker’s exempt from overtime pay.
- They think that if they designate an employee as a “manager” – while throwing in a few supervisory duties – the worker’s automatically exempt. Wrong again. The exempt designation can only come after the job is subjected to a specific “job duties test.”
- They’ve gotten employees to agree to an agreement waiving their right to receive overtime pay. The courts have come down hard on this idea. Such an agreement isn’t only unenforceable, it could set up the employer for a charge that it “willfully” undertook to get around FLSA rules – and that could turn out to be very costly in punitive damages following a lawsuit.
- They think they don’t have to pay for unapproved overtime. It’s true that employers can require employees to get approval prior to working overtime. But overtime’s actual hours worked, and it must be paid – the FLSA makes no distinction between “approved” and “unapproved” OT.
- They haven’t conducted an employee classification audit for several years. Big mistake. First, business changes at light speed today, and employees’ status is constantly shifting. Second, conducting regular audits is proof the company is doing everything possible to comply with the law.
