Labor Department Collects $166 Million Owed to Workers

William Hubbartt

The federal government collected over $166,000,000 in back wages owed to workers by employers during fiscal year 2005. The US Labor Department's Wage and Hour Division collected the money in response to complaints from employees. The department responded to 30, 375 complaints during the period and over 241,000 employees benefited from the department's enforcement actions.

The Labor Department reported that 89% of the monies collected were for violations resulting from unpaid overtime. Failure to pay minimum wage was the next leading category of violations resulting in collection of back pay. In addition, the agency assessed over $10.5 million in civil money penalties.

These penalties represent actions taken by the government to enforce the federal Fair Labor Standards Act, often referred to as the FLSA. This law defines minimum wage requirements, sets certain child labor restrictions, requires the maintenance of wage hour records, and stipulates that employees receive overtime pay for time worked over 40 hours in a week.

Certain jobs are defined as exempt from the FLSA. An exempt job is not subject to the requirements for recording work hours or receiving overtime pay. Job categories that may be defined as exempt include jobs in executive, professional, administrative, outside sales and certain computer related occupational categories. Generally, these jobs must be paid on a salary or fee basis at a rate not less than $455 per week.

The overtime violations occur when an employer fails to pay an employee overtime pay for time worked over 40 hours in a week. One reason for such failure, is the employer's incorrect classification of a job as a salaried exempt job not eligible for overtime when, under the law, the job should be classified as "non-exempt" or subject to the law's overtime provisions.

The Labor Department has published detailed regulations that guide the designation of a job as exempt under one of the five exemption categories. Employers and employees alike often mistakenly believe that the designation of a job as exempt is solely at the employer's prerogotive. In reality, the employer is responsible to evaluate the job's duties compared to the regulation and then specify the job's exempt or non-exempt status.

When enforcing the FLSA, Labor Department representatives may interview employees, examine wage and hour records going back 2 years, or in cases of willful violations back 3 years to collect back pay for an employee. In addtion, civil penalties may be assessed and willful violations may result in cirminal proceedings.

To maintain compliance with this law, employers are advised to define jobs in a job description, evaluate each job to determine it's FLSA exempt or non-exempt status, pay minimum wage or greater, keep a record of hours worked by covered employees and provde overtime pay for covered workers who work over 40 hours in a week.

William S. Hubbartt is author of several books, including Improving Performance Results
Copyright 2007. All Rights Reserved.

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