An initial investigation of a home care company in Kentucky by the U.S. Department of Labor discovered violations of the overtime and recordkeeping regulations of the Fair Labor Standards Act (FLSA). The investigation led to the recovery of $201,356 in back wages for 320 workers. The complete investigation reviewed franchise locations across three states: Kentucky, Alabama and Tennessee. The investigators found violations of the FLSA in all seven franchise locations that were reviewed, to include the following:
- Failure to combine all hours worked by employees when they worked in multiple positions within the same workweek, resulting in failure to pay overtime after 40 hours worked in a workweek.
- Failure to count and pay for hours worked while on-call.
- Failure to count and pay for all travel time and work performed before and after scheduled shifts.
- Failure to include certain bonuses into the rate-of-pay when calculating overtime pay, resulting in underpayment of overtime hours.
- Failure to retain records of all hours worked by employees.
In addition, the US Department of Labor found that the employer at one of the Kentucky locations failed to compensate some nonexempt employees for all of their hours worked at the location. In addition to paying the $201,356 in back wages, the employer has also agreed to correct its noncompliant pay practices.
Wage and Hour Division Acting District Director Richard Blaylock in Louisville, Kentucky explained, “The recovery of wages earned by hundreds of hard-working caregivers employed by [the company] in Alabama, Kentucky, and Tennessee demonstrates the division’s uncompromising commitment to essential workers. When employers deny workers the wages they earn, they make it harder for those workers to provide for themselves and their families. By underpaying, they also gain an unfair advantage over other employers who abide by the law.”
Compliance Perspective
Issue
The Fair Labor Standards Act must be adhered to at all times. It is imperative that all employees who are responsible for determining rates of pay, deciding overtime pay eligibility, and performing recordkeeping of wages are well trained in the Fair Labor Standards Act. It is critical that all federal laws are adhered to as violations of the Act can result in fines and other penalties and sanctions.
Discussion Points
- Review your policies and procedures on fair wages, overtime pay eligibility, and recordkeeping. Update your policies as needed.
- Train all staff who have responsibility for ensuring fair wages, overtime pay eligibility, and recordkeeping so that they are knowledgeable about your policy and procedures to ensure they comply with the requirements. Document that these trainings occurred, and file each signed document in the employee’s education file.
- Periodically audit to ensure that fair wages, overtime pay eligibility, and the recordkeeping of hours worked are accurate and being reported correctly.
