Dive Brief:
- An employer will pay $28,307 in back pay and liquidated damages to 28 employees after the U.S. Department of Labor (DOL) determined that it was operating an illegal paycheck scheme.
- Investigators say that Alabama-based Riviera Stoneworks Inc., Hood’s Discount Home Center of Foley Inc. and Michael J. Hood, the operator of both companies, failed to pay employees overtime when they worked more than 40 hours in a workweek. When employees worked overtime, the employer paid them with two separate checks, both at straight time. One check — on Riviera Stoneworks’ payroll — covered the first 40 hours, while any hours worked beyond 40 were paid in a separate check at straight time by Hood’s. None of the Riviera Stoneworks employees ever worked at Hood’s, DOL said.
- DOL alleged that this arrangement violated the Fair Labor Standards Act's (FLSA) overtime requirements and the U.S. District Court for the Southern District of Alabama ordered the payment. The employer also violated the law's recordkeeping requirements when it failed to display required FLSA posters in conspicuous locations for employees’ reference, DOL noted.
Dive Insight:
The FLSA requires that, unless exempt, employees be paid time-and-one-half for hours worked beyond 40 in a workweek. In addition, employers must post a notice explaining the law in a conspicuous place in all of its establishments so as to permit employees to easily read it.
In this particular case, it's important to note the use of liquidated damages. That tool, which helps gives the FLSA bite, is an award that is equal to the amount a worker is owed in unpaid wages and is often called “double damages.”
Under the Trump administration, DOL has, as expected, emphasized "compliance assistance" over enforcement. We may not see liquidated damages assessed quite as often as we have in the past, but it's clear that they'll still be used in some situations involving violations that were obviously committed in bad faith.