Wage and Hour Violations On the Rise – Why Employers Should Be Concerned

The Wage and Hour Division of the United States Department of Labor (DOL) recently released its fiscal year 2013 statistics.

In Fiscal Year 2013, the DOL received 25,628 complaints and concluded 33,146 complaints. The DOL successfully recovered $249,954,412 in back wages for 269,250 employees. This is a marked increase over earlier FY 2009 report.  The majority of recovered wages were for unpaid overtime.

Some of the low-wage industries that have seen the greatest increase in recovered back wages since FY 2009 are: agriculture, restaurants, and hotels and motels.

In addition, the DOL considered over 1,000 cases of child labor violations. “Fiscal Year Statistics for WHD,” www.dol.gov/whd/statistics/ (Dec. 2014).

Commentary and Checklist

The DOL and the IRS are working together to find and resolve wage issues.

Employers should ask themselves the following when assessing their wage and hour policies:

  • Are your exempt employees properly classified? Too many employers classify employees as exempt when they are really non-exempt.
  • Are your non-exempt employees receiving overtime when they work over 40 hours per week? All overtime, no matter how short the time period worked, must be accounted for and compensated.
  • Are your non-exempt employees receiving proper credit for all their time spent working on your behalf? Employers who do not correctly compensate employee time, especially when an employee is on the employer’s premises, create risk.
  • Are your non-exempt employees receiving their breaks and other compensated time as required by federal and state laws? Laws differ, but many state laws require mandatory paid breaks during the day.
  • Are your employees receiving all the wages due to them? Class actions are emerging against employers who unlawfully deduct money from employee checks.
  • Have you had your risk advisor or employment counsel review your wage and hour practices? If not, now is the time.
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