The Department of Labor's Wage and Hour Crackdown
More and more companies are realizing the importance of maintaining compliance with the Fair Labor Standards Act. We have continued to see the Wage & Hour Division of the Department of Labor grow in strength under the Obama Administration. In this fiscal year alone, the division has gained $244 million in funding, and nearly 100 more investigators. This clearly sends a message that companies who have been getting away with misclassifying workers under the Fair Labor Standards Act, will not be able to get away with their injustices much longer. Whether you are an employer who has doubts about your complete compliance with the FLSA, or an employee who wants to learn if your rights to full and fair pay are being violated, it’s important to gain as much knowledge on the subject as possible.
Many businesses wrongly believe they are simplifying and preventing FLSA claims by labeling employees as independent contractors. Unfortunately for them, it is not that simple as “independent contractor” is more than just a label – there are legal requirements that must be met. In actuality, wage and hour policies should be put in place by all companies. These policies should either prevent any employee for working longer than the standard 40 hours, or it should clearly label properly qualified workers as independent contractors. When employees are not classified as independent contractors, they have to be paid for all the time they work. This too isn’t as easy as it sounds. It is important for an employer to understand exactly how to properly calculate time spent working, so it can identify when to provide overtime pay, and how much as well.
One of the more common mistakes made by companies who are trying to stay within the boundaries of the Fair Labor Standards Act, but still commit violations, is that they don’t understand that overtime pay is more than time and a half. It is time and a half at the employee’s “regular rate of pay,” which can often be different from their base hourly rate.
Every business should take the time to understand the intricacies of the Fair Labor Standards Act, and more importantly, every employee should make an effort to understand the basics of overtime pay laws in order to know when their employer is violating their rights. If you ever feel as if your rights under the Fair Labor Standards Act are being violated, do not hesitate to contact us. We look forward to helping you receive the wages you have earned and deserve.