There are a lot of ways to violate the Fair Labor Standards Act, and the U.S. Department of Labor is taking notice and holding employers accountable. Misclassifying employees as exempt, not paying employees who work through breaks or from home, and not paying employees for hours worked over 40 in a week, are just a few of the types of violations in the news.
The U.S. Department of Labor and Wal-Mart have finally reached a settlement as a result of Wal-Mart’s misclassification of vision center managers and asset protection coordinators as exempt. It was determined these Wal-Mart employees were misclassified back in 2007, at which time Wal-Mart corrected the misclassification. However, it has taken until now to resolve the issue of back wages and damages. Wal-Mart has agreed to pay all back wages and liquidated damages owed to more than 4,500 employees, totaling $4.83 million. It will also pay more than $400,000 in penalties to the Department of Labor.
Here in Minnesota, a local landscaping business has agreed to pay almost $500,000 in back wages and damages to 57 workers who were misclassified as independent contractors, instead of employees. The company and its owners will also pay $22,000 in civil penalties.
The Fair Labor Standards Act is a complicated law with lots of room for errors. Businesses would do themselves a favor by conducting a self-audit of employees to make sure everyone is properly classified, and properly compensated. The expense in the short-term will definitely pay off in the long run. Self-audits are less costly than an audit conducted by the Department of Labor after a charge has been filed.