Some employers think that overtime compliance is optional and even a luxury, especially in a difficult economy. But think again. Failing to comply with the overtime laws could invite an audit by the state or federal department of labor, which in itself is an expensive and invasive process.Even worse, if your company is found to have violated the overtime laws, it could be subject to astounding penalties and damages. These include:Penalties Payable to the Government:Civil penalties of up to $1,000 for each violation and up to $11,000 for each violation of the child labor laws Criminal prosecution and fines up to $10,000 Restraining shipments of goods produced through violations of the child labor, overtime and other wage and hour lawsDamages Payable to WorkersUnpaid wages plus liquidated damages equal to double the rate of unpaid wage – i.e., triple the amount of unpaid wages over a two or three year period Attorneys’ fees at the prevailing rates and court costs for counsel to the employees/plaintiffsGiven that overtime violation cases often involve multiple employees and pay practices that extend over a significant of time, an award that triples the amount of unpaid wages for up to three years can quickly add up to hundreds of thousands or even millions of dollars. For instance, one company that has been subject to several wage and hour cases is Walmart, which recently agreed to pay another $86 million in settlement with workers in California. The federal DOL also recently reached a deal with a security company to pay $1.78 million in back wages to approximately 700 security guards.In addition to the attorneys’ fees and costs that may be awarded to the plaintiffs, your company also will have to pay its own attorneys’ fees and costs. Attorneys’ fees for both sides in these cases can be quite significant, especially if there are multiple plaintiffs and many documents involved, or detailed analysis of the records is required.Finally, there is no way to protect against these claims other than to comply. Employment Practices Liability Insurance (EPLI) usually does not cover overtime violation claims. So even if your company is protected by insurance from unexpected payments for discrimination suits, your company could still face enormous unanticipated liability – enough to threaten your company’s well-being and future plans – if there is a failure to comply with the wage and hours laws.
This is CABL.com posting #334663. Tiny Link: cabl.co/mbzdX
