DOL’s new report: FLSA mistakes cost a whopping $164.1M in FY 2023
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.
In the report, the DOL’s Wage and Hour Division (WHD) reveals that employers shelled out more than $164.1 million for FLSA violations last year.
Luckily, the report also sheds light on what caused employers the most trouble.
In WHD by the Numbers 2023, the feds compiled data from FY 2023 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
Due to FLSA mistakes, the WHD recovered $156,152,548 in back wages for 135,067 affected employees in 2023.
That’s up nearly $100,000 from back wages recovered in 2022, the data reveals. Moreover, the number of affected workers also increased by 8,133 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 $130,686,461 in back wages for overtime violations to 106,759 affected employees.
The silver lining: That’s down about $3.9 million from what WHD recovered in 2022 for back wages due to overtime violations. Even so, the number of workers that were affected went up, with 3,631 more employees impacted by OT violations in 2023.
Some overtime violations are related to employee misclassification. As you probably recall, the DOL recently announced the issue of a final rule to help employers determine whether workers should be classified as an employee or independent contractor under the FLSA. The rule is set to take effect on March 11. Click here for our full coverage.
2. Minimum wage violations
Coming in a distant second, minimum wage violations still racked up significant costs for employers in 2023. The WHD recovered $20,866,247 in back wages for 31,150 workers who were not paid minimum wages.
Unfortunately, that’s up about $2.9 million from what was recovered in 2022 for back wages due to minimum wage violations. And the number of workers affected increased by about 4,500 individuals.
3. Tips-related violations
In 2023, the WHD recovered $4,429,962 in back wages for tips-related violations that affected 6,645 workers.
That’s up about $1.1 million from what was recovered in 2022 for back wages due to tips violations. And the number of affected workers increased by 1,959.
The DOL has specific rules pertaining to tipped employees.
4. Retaliation violations
The feds also recovered $169,878 in back wages for retaliation violations for 60 affected workers in 2023. This is down nearly $30,000 from 2022 – and also shows a small decrease in the number of affected workers.
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 2023. Specifically, the Division assessed $8,039,728 in penalties for child labor violations affecting 5,792 children in 955 cases.
That is almost double the penalties assessed in 2022 when $4,386,205 in civil money penalties were assessed for child labor violations affecting 3,876 children in 835 cases.
For more info on child labor obligations, check out What should we consider in the hiring/employment of a minor?
Free Training & Resources
Resources
The Cost of Noncompliance
You Be the Judge
What Would You Do?
Further Reading
When it comes to religious expression at work, just how far can a company go before crossing a line? For example, earlier this summer, a Cal...
California’s Division of Occupational Safety and Health (Cal/OSHA) has cited nine employers for silica health and safety violations in the...
A federal court in Texas addressed safety training claims raised by a Home Depot worker who was injured while using a ladder to retrieve a b...
On Monday, the EEOC unveiled proposed regulations for the Pregnant Workers Fairness Act (PWFA), the pregnancy discrimination law that took e...
Every employer knows that firing an employee who makes discrimination complaints can lead to a retaliation lawsuit. But what happens when th...
Two employees recently voiced concerns about an employer-mandated dress code, and the EEOC backed up their religious bias claims.Here’s ho...