Last week, the U.S. Department of Labor issued two new press releases announcing investigations resulting in more than $500,000 in back wages being paid to employees. The first, involved the Walt Disney Parks and Resorts in Orlando, Florida where 69 employees will receive $433,819 in back wages due to violations of the FLSA. During its investigation the Wage & Hour Division found employees were not being paid correctly for work activities occurring before and after their normal shifts, when they worked through their meal breaks or when they worked from home. The investigation revealed, “while Walt Disney has specific rules regarding off-clock work, . . .managers within the company were not adhering to those important policies.”
The second press release, involved a Minnesota home health care company, Prairie River Home Care Inc. which was found to have violated the FLSA by failing to pay 144 current and former employees time and one-half their regular rates of pay, for all hours worked in excess of a 40 hour week. Under the Minnesota Fair Labor Standards Act (Minn. Stat. 177.25), employers are required to pay overtime for all hours worked over 48 hours in a week. Prairie River Home Care Inc. was following Minnesota law for overtime compensation. The problem arose because wages and hours of work are covered by both state and federal law. When that is the case, the law with the higher standards must be observed. So, although Prairie River Home Care Inc. was not running afoul of state law, it did run afoul of federal law, resulting in the investigation and penalties.
I’ve said it before and it is worth repeating; it isn’t just important to have a policy addressing overtime issues, it is also important to train employees on the policy, and make sure supervisors are following it. It cost Walt Disney a lot of money, just because supervisors were not following the policies which were in place. Lastly, when both state and federal law are applicable to your business, make sure you are following whichever law, has the standard which is more advantageous to the employee, so you don’t get penalized like Prairie River Home Care.