The Department of Labor’s Wage and Hour Division (WHD) has reportedly lately been cracking down on Fair Labor Standards Act (FLSA) violations among restaurants in Massachusetts. Now, from Human Resources Journal comes a report of the results:
The division’s Boston District Office has discovered $1,307,808 in back wages that are due to 478 workers in at least 31 restaurants.
Wow… that’s a lot of money. And it doesn’t include “liquidated damages,” which are still being computed, but which could potentially double the amount.
What were the problems uncovered? Here’s a list provided by George A. Rioux, the WHD’s district director in Boston:
- Paying employees flat salaries for all hours worked without overtime pay.
- Failing to combine hours worked at multiple locations for overtime purposes.
- Paying incorrect overtime rates to tipped employees.
- Making illegal deductions from employees’ wages.
- Failing to keep accurate records of employees’ hours.
- Misclassifying restaurant workers as independent contractors.
That last item seemed to be of particular concern. Apparently, it’s a new trend from employers seeking to avoid the overtime, minimum wage and record-keeping requirements of the FLSA. And it ties right in with the big misclassification initiative the DOL launched last year in cooperation with several other agencies and state labor departments.
(In other words, if there are people working at your business that you consider “contractors,” you’d do well to consult with your employment legal advisor to make sure you’re in compliance with all the applicable rules surrounding contract workers. The DOL potentially has you in their cross-hairs, no matter what state or industry you’re in.)
So even if you’re not in the restaurant business in Massachusetts, you could find yourself tripped up by one or more of these issues.
I’ve written before about how a time and attendance system, properly configured and used, can help reduce your risk in the event of a DOL wage and hour audit or lawsuit. Looks like keeping accurate records is becoming even more important nowadays!
If you’re still using handwritten records — or worse yet, no formal records at all — to track employee time, check out our full line of time and attendance recorders. You’re sure to find a solution that will work for your business.