DOL’s New Report: FLSA Mistakes Cost a Whopping $149.9M in FY 2024
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As an HR pro, you know that FLSA mistakes can be expensive. But even so, the sky-high cost of noncompliance found in the feds’ latest report is enough to cause sticker shock.
Luckily, the report also sheds light on what caused employers the most trouble.
In Impact in Fiscal Year 2024, the feds compiled data from FY 2024 and tallied up the money it recovered for affected workers. Here, we’re going to focus on FLSA mistakes.
FLSA Mistakes: Big Payouts for Back Wages
The DOL’s Wage and Hour Division (WHD) recovered more than $149.9 million in back wages due to FLSA mistakes for 125,301 workers last year.
Here’s a small silver lining: That’s actually down by a little more than $6 million from the back wages recovered in FY 2023, the data reveals. Moreover, the number of affected workers also decreased by nearly 10,000 individuals.
Let’s break down those numbers to figure out the most common mistakes employers made last year.
1. OT Violations
Not surprisingly, the lion’s share of recovered back wages was for overtime violations, the feds revealed. Specifically, employers paid out $126,967,097 in back wages for overtime violations to 101,043 affected employees.
The silver lining: That’s down about $3.9 million from what WHD recovered in 2023 for back wages due to overtime violations. And the number of impacted workers decreased by 5,716.
2. Minimum Wage Violations
Coming in a distant second, minimum wage violations still racked up significant costs for employers in 2024. The WHD recovered $15,306,067 in back wages for 21,543 workers who were not paid minimum wages.
That’s down about $5 million from what was recovered in 2023 for back wages due to minimum wage violations. And the number of affected workers decreased by nearly 10,000 individuals.
3. Tips-Related Violations
In 2024, the WHD recovered $7,410,410 in back wages for tips-related violations that affected 10,651 workers.
That’s up nearly $3 million over what was recovered for back wages due to tips violations in 2023. And the number of affected workers increased by 4,006 individuals.
The DOL has specific rules on tipped employees. And if you missed it, last month, the agency released an opinion letter clarifying that managers or supervisors cannot take a share of a tip pool, even if they perform tipped work.
4. Retaliation Violations
The feds also recovered $274,956 in back wages for retaliation violations for 60 affected workers in 2024. This is up by about $105,000 from 2023, though the number of affected workers held steady at 60.
As an FYI, the FLSA prohibits retaliation against any employee who files a complaint or participates in an agency investigation, the DOL clarified in a fact sheet.
Penalties for Violating Child Labor Provisions of FLSA
In addition to recovering back wages for short-changed employees, the WHD also assessed civil money penalties for child labor violations in 2024. Specifically, the WHD assessed $15,164,150 in penalties for child labor violations affecting 4,030 minors in 736 cases.
That’s almost double the penalties assessed in 2023 when $8,039,728 in civil money penalties were assessed for child labor violations affecting 5,792 minors in 955 cases.
Both federal and state law apply to the employment of minors, employment attorney Fiona Ong of the firm Shawe Rosenthal LLP previously told HRMorning.
Minors are prohibited from working in certain occupations or from using dangerous materials or equipment. In addition, the laws:
- restrict the number of hours that minors may work (which differs during the school year)
- set minimum wages that must be paid, and
- require breaks (which may not always be required for adult employees).
Moreover, some states require minors to obtain a work permit in order to be employed, so be mindful of local laws, Ong explained.
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