My law partner, Marylee Abrams has blogged in the past about the importance of properly classifying your employees. Not only is it important to properly classify your employees it is also important to pay them appropriately for the actual hours they work.
An investigation by the U.S. Department of Labor Wage and Hour division at the Umatilla Chemical Depot plant determined 603 employees involved in departments including maintenance, munitions, and warehouse work, were underpaid for their time in the workplace. “In some instances, workers were not relieved for their lunch time, resulting in inappropriate pay deductions for lunch breaks that could not be taken.” These pay deficiencies are violations of federal laws including the Fair Labor Standards Act (FLSA). This investigation has resulted in a payment of more than $4.2 million dollars in back wages and additional civil monetary penalties.
The Fair Labor Standards Act provides an employee must be paid for all of the time considered to be hours worked and all time that is hours worked must be counted when determining overtime hours worked. The FLSA defines the term "employ" to include the words "suffer or permit to work". If an employer knows or has reason to believe that the employees are continuing to work when they are supposed to be on break and the employer is benefiting from the work being done, it should be compensated time.
This was a very costly error in employee compensation. I’m sure the employer is not likely to make this kind of mistake again. The U.S. Dept. of Labor will not hesitate to take action against employers who violate the law. In addition to making sure employees are properly being compensated for all hours worked, the U.S. Dept. of Labor is also investigating if employees are appropriately classified.