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FLSA Compliance Means Paying
Employees Fairly |
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The Fair Labor Standards Act of 1938 (FLSA) provides for minimum standards for both wages and overtime entitlement, and spells out administrative procedures by which workers must be compensated for work time. Workers covered by the FLSA are entitled to minimum wage and overtime pay at a rate of one and a half times their regular rate of pay after 40 hours of work in a workweek (overtime is paid by the week, not the day).
FLSA compliance violations cost U.S. companies millions of dollars each year. From 2002 to 2003, 314,660 employees collected monetary awards—a 30% increase. FLSA cases constitute about 83% of all cases handled by the Department of Labor in a fiscal year.
To be in compliance with FLSA, employers must retain records of employees' earnings for three years. Records should include each employee's information, such as name, address, job title, hours and days worked, amounts earned each day or week, regular hourly pay rate, total overtime pay for the week, deductions or additions, total wages paid for the pay period, and dates wages are paid. |
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| Dangers in Violating FLSA |
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| Employers who willfully or repeatedly violate FLSA regulations are subject to civil monetary penalties: |
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| VIOLATION |
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PENALTY |
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| • Minimum wage or overtime pay |
Up to $1,000 per violation |
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| • Child labor provisions |
Up to $10,000 per young worker |
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| • Willful violations |
Criminal prosecution and fine up to $10,000 |
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| • Second conviction |
Possible imprisonment |
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There is also the possibility of violation of state wage payment laws, which usually carry their own penalties, fines, and attorney’s fee awards.
For more information about FLSA compliance, click here to download a free HR compliance report. |
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A group of employees at the York County (PA) Transportation Authority has filed a lawsuit against their employer claiming that the Authority has not complied with the Fair Labor Standards Act because it does not compensate employees for time spent traveling to and from a work site. The complaint states that employees must report to a central terminal every day, clock in before their work period begins, and then board vehicles to be transported to their workplace. At the end of the day, they again board vehicles and return to the terminal to clock out before the end of the day. These transportation periods take between 40 and 60 minutes each day, and the employees receive no compensation for this time, according to their suit. The plaintiffs are asking for the full amount of their wages that were not paid within 3 years of the filing of the complaint; liquidated damages amounting to 25% or $500, whichever is greater; an award for the costs of the action; pre- and post-judgment interest on all amounts awarded; payment of attorney’s fees; and injunctive relief to prevent future FLSA violations. |
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