As reported in 2011, The U.S. Department of Labor’s (DOL) wage and hour enforcement division continues to aggressively seek wage and hour violations as directed under the Obama administration.
The DOL has been given unprecedented instruction to seek civil penalties even in a first investigation of a worksite. According to Paul DeCamp, former administrator of the Wage and Hour Division under President George Bush, commented this was very unusual, saying penalties used to be only for second or third violations.
DeCamp said he’s also seeing a broader effort to expand claims to an enterprise-wide basis. In other words, it used to be that an investigation would be resolved to a single worksitea. Now if there is a violation at a site, the assumption is that violoations must be occurring on a companywide basis and investigations are often follow-up to all company worksites.
Industries targeted by the Wage and Hour Division include:
- Construction, specifically residential construction;
- Corporate parent/subsidiary;
- Hospitality, specifically food/beverage and housekeeping;
- Home health care;
- Child care;
- Meat/poultry processing;
- Staffing companies; and
- Gentlemens’ clubs.
Executives and Officers – Watch Out
An increasing number of class-action wage and hour complaints are naming individual officers, such as vice presidents of HR, and managers as defendants, DeCamp noted. Courts have been reluctant to dismiss claims against individuals who arguably had some role in setting or implementing the policies at issue, particularly where there is an ownership interest, he noted.
Exempt Classifications Increasingly Scrutinized
Positions receiving a higher level of scrutiny when it comes to exemption classification include accountants, engineers and IT. “There is a lot of activity with the professional exemption,” DeCamp remarked. Walmart recently felt the sting of the DOL in May 2012 when the department fined the retailer $4.8 million in back wages due to miss classification of employees.
DeCamp highlighted timekeeping practices that can lead to class actions, including:
- Automatic meal deductions;
- Supervisors editing employee time;
- Required early arrival;
- Off-the-clock pre-shift meetings; and
- Off-the-clock shift exchange.
The automatic meal deduction is only unlawful if a meal is not taken, but often the DOL will conclude it has not, particularly in the health care industry, he noted.
In addition to complying with the FLSA and state wage and hour laws, Decamp recommended that employers tell employees that if their time records are not accurate, they should let employers know immediately.