One of the many differences between an experienced business owner and someone venturing out for the first time is that the former appreciates how critical employment laws are to run a successful business. Trembly Law Firm is equipped to assist companies with these complex laws, including the Fair Labor Standards Act (FLSA). You know what it is, even if you have never heard of it. It establishes a federal minimum wage, overtime pay, record-keeping, and child-labor standards. Failing to comply with FLSA generates enormous risk. This is a surefire way to steer your business toward costly lawsuits and reputational damage. With that in mind, let’s explore the FLSA, the risks of non-compliance, and how legal counsel is a critical component of being protected.
The FLSA & Its Implications
The U.S. Department of Labor was the driving force behind the FLSA. Once established, the FLSA laid out guidelines and protections for employees—many of which we addressed in the opening section of this blog. If you have ever been paid time and a half for work you put in beyond a 40-hour workweek, then you have been directly impacted by the FLSA. Because we mentioned record keeping, we will go over what that entails. When you understand what you are obligated to keep track of, you will get a better sense of the demands that the FLSA puts on employers.
- Employees’ personal information such as names, addresses, birth dates, and gender
- Records that reflect how much the employees have worked
- How much money was paid to each employee to include the rate and basis of pay
- Deductions that were withheld such as taxes and garnishments
- How much eligible employees made in overtime pay
- Classification records (i.e., exempt or non-exempt)
- Timekeeping records that speak to time-off, work hours, and even breaks (which may be mandated)
The Risk of Non-Compliance
Businesses who do not follow the rules and regulations put forth by the FLSA put themselves in front of a tremendous amount of risk. Employees who believe their rights have been violated can file lawsuits against their employer to recover unpaid wages, overtime, and damages. In addition to financial penalties, employers may be required to issue back pay while covering the employee’s attorney’s fees.
In terms of indirect impacts, violating the FLSA can tarnish a company’s reputation. Think back to 2015 when Walmart settled a class-action lawsuit over 185,000 employees filed. Walmart was accused of failing to provide meal and rest breaks, manipulating time records, and not paying overtime. Ultimately, Walmart settled for $65 million, which was one of the largest settlements since the FLSA was created.
How Attorneys Can Mitigate FLSA-Related Lawsuits
This can be attacked from many directions. Attorneys can conduct extensive audits to assess whether their current practices align with the FLSA’s requirements. For example, they can review how you classified your employees, your payroll records, and your existing policies. To circle back to the case against Walmart, their attorneys likely helped them develop policies that complied with the FLSA. However, they weren’t being practiced. In addition to policies and procedures, your company needs to be trained regularly to ensure that management and HR have a command of the provisions set forth by the FLSA. Furthermore, they must be equipped to handle compliance violations when they surface.
Though most of our discussion centers around proactive compliance strategies, attorneys are pivotal for dispute resolution and litigation defense. When your business comes in contact with an FLSA-related issue, attorneys provide skilled representation to protect your business and its interests. They can negotiate settlements, mediate disputes, and defend you in court if necessary.
This is precisely what the dedicated attorneys at Trembly Law Firm do for our clients. To continue this conversation with legal counsel, contact our office to set up your consultation.
