Here is what happens when an employer engages in illegal wrongdoing with the Fair Labor Standards Act.
They get fined $2 million!
The guilty party
The guilty party is a Mexican restaurant chain in Tulsa, Oklahoma. The owner was accused of the following, according to Erin Dougherty Foley and Craig Simonsen , of Seyfarth Shaw:
- Falsifying payroll records
- Withholding records requested by the WHD investigator,
- Lying to the WHD investigator and instructing his employees to lie
- Recklessly disregarding his duty to determine whether it was violating the FLSA,
- Recklessly disregarding FLSA requirements,
- And recklessly disregarding his duty to keep accurate records.
That is pretty damning accusations and the court agreed. As a result the man is paying $2,137,627.44 judgment to the Department of Labor.
The Seyfarth Shaw attorneys note that this is an extreme case, but it should caution all employers to review their policies and practices. The mistakes made in this case were deemed to be “willful”, but many employers make known mistakes for which they can still be held responsible. You need to understand the rules and then try to avoid skirting these rules.
Four years ago I wrote Why Paying Attention to Wage and Hour Compliance is IMPORTANT, where I talked about another three cases that cost the employers $1.3 million. Whether you are making mistakes of omission or commission it can still be an expensive lesson.
Make sure you are doing it right. Here is some guidance on how you can avoid making mistakes. Five Steps to Diminish Wage & Hour Problems: Revisited