It is not unusual for us to bring on a new client just after they have written a big check for wage and hour violations. A check that really left a mark on their bank account, but also on the reputations of their businesses. Violations of wage and hour law almost always find themselves into the media and hence, drawing the company into the court of public opinion where they rarely get an opportunity to explain themselves. Then comes the actual hearing and fines from the local, state and federal judiciary.
When asking new clients who had been recent defendants in wage and hour actions how it happened, we hear many excuses such as “we didn’t know the rules”, or “we couldn’t afford to pay overtime”, or “the minimum wage is too high”, or “the employee said it was okay, we had an agreement”. My personal favorite, “the payroll company didn’t do it right” is usually a stage 2 excuse after the first few in order to ‘transfer’ the responsibility. No matter the excuse, it did not prevent the action. The assumption on the employer was that they would not get caught and that it would always fly under the radar.
That is, until said employee understood their rights, or became a disgruntled employee. It only takes one employee to uncover a general practice of wage and hour violation, and that’s when the trouble begins. Generally, an employee cannot waive their rights, for example, to overtime pay or to reduced overtime pay based on an agreement with their employer.
Only after a wage and hour action, does the employer ‘get religion’ and invest the time and energy into not only making themselves compliant, but also ensuring that their employee practices and policies stay compliant. Usually the ‘teacher’ in most of these cases is their state’s department of labor, and the feds acting under the Fair Labor Standards Act, as well as their own defense attorney’s trying to stave off the case. But so long as there are payroll companies and time and attendance records being kept, proving a violation of wage and hour law is a very easy thing to do.
Too many clients we see fail to take the time to focus on making sure they are compliant, most often due to the normal rigors of starting and running a business. Usually, up until there is a complaint, they don’t even know what Wage and Hour really means. Wage and hour laws are enforced on both a state and federal (and in some cases, municipal) level It is possible, to be compliant on a federal level while at the same time violating state wage and hour laws.
All wage and hour laws are and were designed for the protection of employees, and include regulation to prevent and remedies for:
- Getting paid less than minimum wage
- Not being paid on the proper frequency
- Not being paid for hours worked
- Not getting overtime pay, or the proper overtime pay
- Being misclassified as an independent contractor
- Being misclassified as an ‘exempt’ employee
- Tips violations/sub minimum wage payments
- Earned sick time/family leave violations
- No meal breaks
Usually an employment lawyer is a helpful resource, but not the only resource when seeking to be compliant with wage and hour laws. A competent HR Professional or simply checking with your state and local agencies, as well as the federal Dept of Labor will provide a bevy of great resources that will help you understand.
US Department of Labor: https://www.dol.gov/WHD/foremployers.htm#ca
State Departments of Labor LInks: https://www.dol.gov/whd/contacts/state_of.htm
Society for Human Resource Management: https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/complyingwithuswageandhour.aspx