Corporate math isn’t adding up: DOL targets illegal wage violations

Explaining corporate math is one of the trendiest ways for frustrated employees to take a jab at their employers right now. You’ve probably seen plenty of posts and videos featuring workers’ views on corporate math.

It might be a new catchphrase on social media, but the reality is, the DOL has been on the lookout for corporate math mistakes for years.

In fact, just this month alone, the DOL has already recovered nearly $12.5 million for more than 1,000 workers due to corporate math mistakes that amounted to FLSA violations. Plus, the agency handed out several civil money penalties.

Corporate math leads to costly payouts

A restaurant chain on the East Coast made the costliest corporate math error this month — at least so far. Ultimately, it agreed to pay $11.4 million in back wages and damages to more than 1,000 employees in seven states (Connecticut, Maryland, Massachusetts, New Jersey, North Carolina, Pennsylvania and Virginia).

After an investigation, the DOL alleged that 40 Plaza Azteca Mexican restaurants owned by Ruben Leon paid back-of-the-house employees predetermined amounts, which resulted in failures to pay the required minimum and overtime wages. The company also failed to maintain accurate records of employees’ work hours and wages, the DOL found. The company also paid $625,000 in civil money penalties for the “repeat and willful nature of the violations.”  

More expensive FLSA mistakes  

Here are six more companies that paid out hefty settlements due to similar FLSA violations:  

• In Alabama, Jennings Professional Services, an in-home, day and overnight healthcare provider, misclassified 67 workers as independent contractors – and paid them straight-time rates for all hours worked, according to a DOL Wage and Hour Division investigation. Because workers didn’t receive overtime pay for working more than 40 hours in a workweek, this amounted to violations of the FLSA, the agency said. It recovered $532,842 in back wages and damages for the affected workers.
• In Connecticut, a federal court ordered a homecare service business, CareCo Shoreline Inc. d/b/a CareCo, and its owner Helga Pfanner, to pay $92,150 in back wages and damages to 107 in-home caregivers. A DOL investigation found the employees did not receive overtime pay when they worked more than 40 hours in a workweek, which violated the FLSA. The court also ordered the company to pay another $80,000 in civil money penalties due to the “willful and repeated nature” of the violations.
• In Hawaii, the DOL’s Wage and Hour Division found Heide & Cook LLC, an HVAC company, paid regular, straight-time rates for some overtime hours. The agency recovered $84,540 in overtime back wages and an additional $84,540 in liquidated damages for 15 employees. The company was also assessed a $5,000 civil money penalty for the FLSA violation.
• In Illinois, a federal judge ordered Poros Inc., operating as Bentley’s Pancake House, to pay $110,000 in tip violations, overtime back wages and liquidated damages to 28 workers. After an investigation, the DOL alleged the company kept servers’ tips, failed to pay kitchen staff overtime wages and failed to keep accurate pay records from at least Feb. 5, 2018, to Feb. 2, 2022. The court also ordered the company to pay $13,000 in civil money penalties for “willful violations” of the FLSA.
• In Mississippi, the DOL’s Wage and Hour Division recovered $59,417 for 64 workers from their employer Arrington Assisted Living, which provides housing and nursing care, housekeeping and meal preparation services for older adults. The DOL’s investigation found the employer failed to properly carry over hours from the beginning of a workweek into the next pay period when compensating employees on a semi-monthly pay schedule, which resulted in failures to pay overtime. The employer also paid $7,616 in civil money penalties.
• In Washington, T’s Pro-Painting LLC failed to pay 49 employees their overtime rates for hours worked over 40 in a workweek, a DOL Wage and Hour Division investigation found. Investigators also said the company did not keep time records for its workers. The agency recovered $57,330 in overtime wages and another $57,330 in damages for the employees. It also assessed $4,035 in civil money penalties.