- Department Of Labor Announces Increase in Wage & Hour Penalties for Employers
- July 23, 2016 | Author: Christopher R. Fontan
- Law Firm: Brunini, Grantham, Grower & Hewes, PLLC - Jackson Office
- When it comes to wage and hour issues, most U.S. employers are focused on preparing for the Department of Labor’s (DOL) much-debated New Overtime Rule that is set to go into effect on December 1, 2016. Most notably, under the New Overtime Rule, the requisite salary level for exempt employees jumps from $23,660 annually (or $455/week) to $47,476 ($913 per week). However, the federal agency has not closed up shop for the year.
On June 30, 2016, the DOL announced an increase in the dollar value of the civil penalties that that agency assesses to employers for certain violations of the minimum wage and overtime provisions of the Fair Labor Standards Act. Deemed an “interim adjustment,” pursuant to the 2015 Federal Civil Penalties Inflation Adjustment Act, the DOL’s Wage and Hour Division will increase the civil penalty assessed for “willful violations” from $1,100 to $1,894 per violation.
The DOL’s regulations define a “willful” violation of the minimum wage and overtime provisions as one in which the employer either knew that its conduct was prohibited by law, or showed a “reckless disregard” for the requirements of the law. While there is no bright-line test on what qualifies as a willful violation, in 2015, the Fifth Circuit Court of Appeals ruled that an employer committed a willful violation of the FLSA by failing to keep adequate records of extended hours worked by an employee. See Ramos v. Al-Bataineh, 5th Cir., No. 13-20749 (March 30, 2015).
The DOL’s proposed increase represents a 73% jump in the value of assessed penalties-on a per violation basis. Importantly, the DOL assesses this penalty in addition to any actual back wages owed to the employee(s). Plus, section 16(a) of the FLSA authorizes criminal sanctions against any person who is shown to have violated the FLSA intentionally, deliberately, and voluntarily, or with reckless indifference to or disregard for the law’s requirements.