Louisiana Company to Pay Back $2 Million in Overtime Back Wages

Following an investigation, Hutco, a major staffing agency in Louisiana, must pay back almost $2 million in overtime back wages to 2,267 workers assigned to client worksites throughout Louisiana, Mississippi, and Texas. The investigation found that the company used improper pay and record-keeping methods, resulting in employees being denied the overtime pay they deserve – a direct violation of the Fair Labor Standards Act.

Throughout six branch establishments, Hutco was found to have violated overtime pay laws in all six branches. The company avoided overtime pay by mischaracterizing certain wages as “per diem” payments and excluded these wages when calculating overtime premiums. In other words, employees were denied earned overtime compensation due to the misclassification of the “per diem” payments – which were not really reimbursements, but disguised additional wages that should have been factored into the overtime pay rate calculation. This practice also resulted in more violations, including FLSA record-keeping rules, which prohibits tampering with the accuracy of employees” true wages and actual hours worked.

Hutco is not the first company to run into problems with the manner in which it uses per diem payments.  The courts have examined a number of cases on the topic and are on the lookout for so-called per diem payments that look and smell more like ordinary wages and are really just another way of paying compensation.  In such situations the courts have recognized that they are “nothing more than a disguised wage.”  Legitimate per diem payments are typically related to expenses workers incur for things such as meals, lodging, and travel in order to perform their work.  Payments made for this purpose may be excluded from the definition of “wages” and, therefore, the overtime pay calculation.

In addition to paying back wages, the settlement has also required Hutco to commit to future compliance with the law. The agreement includes specific measures to ensure the company is paying their employees according to the law to prevent future violations, including standards to correctly identify and compensate workers who qualify for bona fide per diem payments. These measures will also ensure the company’s employees are being paid accurate overtime. Hutco must also maintain accurate records from here on out, including time and payroll records.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Furthermore, the state has not enacted its own Louisiana State overtime laws, and therefore, employers must go by the rules and regulations set forth by Federal Law – meaning employees are only protected by the federal wage and hour regulations contained in the Fair Labor Standards Act.

If you think you aren’t receiving the Louisiana overtime pay you deserve, it’s important to contact an experienced attorney to get the money that is rightfully yours. Contact the Lore Law Firm today by calling us at 1-866-559-0400 or filling out a free evaluation form.

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