The Fair Labor Standards Act (“FLSA”) is a federal law that affects employees in the private sector and in federal, state and local governments across the country. The FLSA establishes minimum wage, overtime pay, record keeping, and youth employment standards. One of the purposes behind the FLSA is to protect employees from employers taking unfair advantage over their employees. The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.
There are several exceptions to the FLSA including employees employed as bona fide executives, administrative, professional, outside sales employees, and independent contractors. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684 a week. Job titles alone do not determine an employee’s exempt status. However, many contractors and employees exempt from the FLSA try to take advantage of small businesses with FLSA complaints.
Whether willfully or by accident, employers may commit a violation of the FLSA. These wage and hour violations may vary in type. The most common of them is misclassifying employees in terms of who is exempt from the FLSA and who is not, believing salaried employees aren’t entitled to overtime pay, and not correctly recording overtime hours.
Penalties for FLSA violations
Wage and hour laws have specific penalties for employers who accidentally or willfully violate the FLSA. They can be monetary, criminal, or civil penalties.
- Overtime violations: a civil monetary penalty up to $1,000 for each violation
- Minimum wage violations: a civil monetary penalty up to $1,000 for each violation
- Child labor violations: a civil monetary penalty up to $10,000 for each child worker who was employed
- Willful violations of the FLSA: monetary penalties up to $10,000 and criminal prosecution; a second conviction may lead to imprisonment
If there are any unpaid wages and overtime hours that the employer owes, they must pay them. The Wage and Hour Division (“WHD”) of the U.S. Department of Labor might supervise the payment of back wages. The Secretary of Labor may start legal proceedings for recovering back wages or an equal amount as liquidated damages. At the same time, the FLSA prevents the shipment and sale in interstate commerce of any goods produced during the violation of the minimum wages and overtime pay laws. If the employer refuses to correct their offenses, the WHD could prohibit the shipment of goods.
Who can bring a FLSA suit?
FLSA complaints can be brought from 2 different sources:
- An employee who believes their FLSA rights have been violated.
- A third party who believes that an employer is violating the FLSA rights of a group of employees. These third parties can be low-level workers who are part of that group of employees, supervisors of the group, or other company executives.
Additionally, employment laws state that an employer cannot fire or discriminate against an employee because they made an FLSA complaint or participated in the trial surrounding a complaint. During the complaint process, no one investigates the immigration status of the employee. Undocumented workers are also entitled to minimum wage and overtime compensation, and the employer cannot use the employee’s immigration status in their defense in court.
What to do as an employer?
Collect all pertinent information related to the FLSA complaint. including the name of the employee bringing the FLSA complaint forward, the type of work they did, as well as how and when the employee was paid—on a particular day of the week, by cash or check, etc. On top of this, any additional information you provide will be beneficial to the case. Think along the lines of copies of pay stubs, details about pay practices of your business, your personal records of hours employees worked (such as timecards or an app where you keep track of employees’ hours), and similar timekeeping information.
Statute of Limitations
According to the FLSA, there is a two-year statute of limitations for violations not deemed willful. For willful violations, there is a three-year statute of limitations. What does this mean? Statutes of limitations limit how much time can pass between the moment a violation occurred and initiating a federal lawsuit regarding the violation. For example, if your employer willfully violated the FLSA in March 2020, legal proceedings must begin before March 2023 at the latest. Otherwise, the statute of limitations on this offense will expire, and you won’t be able to recover back wages. Because of these statutes of limitations, it is recommended that the employer (or their representatives) check when an employee filed their FLSA complaint as soon as possible to increase their chances of avoiding litigation.
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