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A Publication of WTVP

In 2007, the Wage and Hour Division of the Department of Labor recovered a record $220 million in back wages for over 341,000 employees. The agency concluded 30,467 compliance actions and assessed over $10.3 million in civil money penalties. To make matters worse, President Bush’s budget proposal is for $194.1 million to the Wage and Hour Division, a $17.4 million (10 percent) increase that includes funding for 75 new investigators and field support staff. The budget also proposes an increase in the amount of fines that can be assessed against employers who willfully violate child labor laws.

To add fuel to the fire, violations of the wage and hour provisions of the Fair Labor Standards Act (FLSA) and the analogous state statutes (such as the Illinois Minimum Wage Act) are the single largest liability exposure for employers. Since 1997, wage and hour litigation has tripled while most other employment litigation has stabilized or declined. More wage and hour collective/class actions have been filed in recent years than all other types of employment class actions combined.

The bottom line is this. As an employer, you want to avoid a wage and hour investigation or lawsuit. This is a situation where an ounce of prevention is worth a pound of cure. The following are some basic strategies to put into practice:

  • Avoid unfair compensation practices. Make sure employees are compensated in a consistent manner. If an employer’s pay practices are consistent, complaints are less likely to arise, and the employer will be in a better situation if DOL does launch an investigation.

Taking these steps will help decrease your organization’s exposure to wage and hour liability, deter administrative agency investigations, and, if litigation does occur, minimize exposure. While most employers follow these guidelines on a routine basis, it is always a good idea to review organizational practices and make adjustments as needed. IBI

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