seyfarth.jpgAuthored by Alex Passantino

As we have noted several times here on the blog, over the past several years WHD has been dramatically increasing its use of the full complement of enforcement tools.  Liquidated damages.  Civil money penalties.  Litigation.  Consent judgments.  “Hot goods” violations.  Anything WHD can do to make the violation more painful than compliance.

Few cases exemplify the extent of WHD’s enforcement efforts than a recent investigation and litigation action out of WHD’s Northeast Region.  In a consent judgment in the U.S. District Court for the District of Massachusetts, WHD secured more than $150,000 in back wages, plus an equal amount in liquidated damages.  In addition, the employer paid more than $10,000 in civil money penalties because the violations were willful and repeated.  The employer was enjoined from future violations of the minimum wage, overtime, and record-keeping requirements of the FLSA, as well as from shipping goods produced in violation of the law (“hot goods”).  The injunction means that WHD can seek to have the employer held in contempt for future violations of the law.   

That Seems Pretty Harsh

It is.  This is WHD applying a full-court press.  But . . . although WHD has certainly made clear its intentions to pursue this type of relief in a wide variety of cases, this case appears to involve particularly egregious violations — e.g., failure to pay minimum wage to agricultural workers reportedly working up to 90 hours per week.  These types of cases, and the panoply of remedies sought by WHD are still — at this time — the exception, rather than the rule.

Well . . . What Should We Do?

WHD’s stated desire to use the full complement of its enforcement tools means that you cannot simply wait around.  Regular readers of the blog will know our first recommendation:  conduct an assessment of your wage and hour practices.  Enforcement by WHD and its counterparts in many states is not going away any time soon.  The only realistic way to avoid back wage liability, civil money penalties, and liquidated damages is to take steps to ensure your compliance well in advance of the investigator showing up at the door and flashing her badge.

Just as important as ensuring compliance, however, is understanding your rights and obligations when you receive the notice of investigation or when the investigator shows up at the door.  And that understanding should extend to your field managers — it’s great to have a comprehensive response plan at the corporate level, but even the best plan can easily turn out to be of no use if field personnel do not know (and follow) established protocols.

WHD has been targeting employers with all of the tools in its arsenal.  Review your payroll and classification policies and practices.  Develop a protocol for responding to investigations by state and federal labor agencies.  Educate the employees responsible for implementation of that protocol.  Three steps that will go a long way towards shielding you from the inevitable knock on the door.

What Happened, Dude? is a weekly blog post in which we break down recent enforcement activity by the U.S. Department of Labors Wage & Hour Division (WHD), look at what went wrong for the employer, and share some lessons for other employers.