Company Pays $370K in Back Wages For Federal Overtime Violations

On July 7th, 2022, the U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) announced that an Indianapolis, Indiana, security company recently paid $370K in back wages and other damages for federal overtime violations. Markedly, the violations mirror similar ones by the same company found in a 2018 investigation. The WHD continues to enforce employment laws under the Fair Labor Standards Act (FLSA) as it pursues claims of federal overtime violations. For example, in an earlier investigation, in April 2022, the WHD recovered $867K for overtime violations and tip-stealing at a Texas restaurant.

Wage and Hour Standards Under the FLSA

The FLSA provides for several federal wage and hour standards. These include the federal minimum wage, mandatory overtime pay, recordkeeping requirements, and youth employment standards. The FLSA is one of five commonly cited employment laws that businesses should familiarize themselves with. In general, the FLSA covers employers in the private sector and federal, state, and local governments. Currently, the FLSA entitles covered workers to the following minimum wage and overtime pay requirements:

• The federal minimum wage of not less than $7.25 an hour, effective July 24th, 2009.
• An overtime pay rate of not less than one and one-half times the regular pay rate during hours worked more than 40 a week.

Accordingly, the WHD enforces federal minimum wage, overtime pay, recordkeeping, and child labor requirements under the FLSA. To ensure employers succeed in their compliance efforts, the WHD keeps a team of investigators to enforce several labor laws applicable to businesses.

The Company’s Federal Overtime Violations

The WHD’s investigation discovered that the Indiana company failed to pay federal overtime premiums to some employees for hours they worked over 40 in a workweek. However, when the company did pay overtime, they did not accurately calculate overtime wages owed. The company did not account for employees who received two or more pay rates for different jobs performed during the same workweek. In addition, the company failed to maintain accurate payroll records, as required by the FLSA.

Penalties for Federal Overtime Violations

Following a June 7 consent judgment entered in the U.S. District Court for the Southern District of Indiana, the company paid $185,459 in back wages owed to 215 employees. It also paid an equal amount in liquidated damages to the DOL for distribution to those employees. Finally, the company paid a $69,540 civil money penalty for its flagrant federal overtime violations. Indeed, the DOL first investigated the company in 2018, finding similar violations. In the earlier investigation, the company paid 158 workers $98,949 in back wages and liquidated damages. As a result of those violations, the company had already paid $25,000 in civil money penalties. As Indianapolis Wage and Hour District Director Patricia Lewis stated, “The company did not change their pay practices after our 2018 investigation and did not pay employees the wages they were due … these failures hurt workers and their families by denying them the wages they count on to meet their needs.”