Watch it!

by Deborah Z Mark

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Time is not always on your side.

Just ask LinkedIn.

The company was found to be in violation of overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA).

After completing an extensive investigation, the U.S. Department of Labor’s Wage and Hour Division required LinkedIn to pay $3,346,195 in overtime back wages plus $2,509,646 in liquidated damages to 359 current and former employees.  Affected employees worked at LinkedIn branches in California, Illinois, Nebraska and New York.

Investigators found that the company failed to record, account and pay for all hours worked in a work week.

Ooops.

The FLSA requires all covered, nonexempt 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 hourly rate for any hours over 40 in a work week.  States with hourly minimum wages higher than $7.25 (Arizona is at $7.90) are bound by the higher rate.

According to the Administrator of the DOL’s Wage and Hour Division, Dr. David Weil, LinkedIn has shown a great deal of integrity by fully cooperating with the investigations and agreeing to pay all overtime back wages due.  The company has also committed to take steps toward future compliance.

That’s Not All

Other major companies have recently settled with employees after coming under scrutiny by the DOL:

  • 24 Hour Fitness:  $17.5 million to 860 employees for alleged off-the-clock work by trainers and misclassification of managers
  • Roto-Rooter Services:  $14.3 million for alleged misclassification of service technicians
  • Old Republic Title Company:  $12 million to 1,100 employees for alleged meal break violations and off-the-clock work

Your company could be next.

Stay on Track

Be careful when tracking employee hours worked.  Remember, overtime is based on hours worked in a work week, not averaged over the pay period.

So pay attention, and watch the time.

For example, if your payroll is every other week (biweekly), it doesn’t necessarily mean that an employee has no overtime if he worked a total of 80 hours during the pay period.  Maybe he worked 45 hours the first week and 35 hours the second week.  He would then be owed 75 hours at the regular rate plus 5 hours at the overtime rate.

If your payroll is twice a month (semimonthly), take extra care when calculating overtime.  The work week rule still applies, regardless of whether or not the work week crosses a pay period.

Be sure to pay nonexempt employees for all hours worked, including mandatory meetings, training, and time worked offsite or during lunch breaks.

Does your company have a “no paid overtime without prior approval” policy?  Even if an employee works over 40 hours in a work week without permission, you are required by law to pay overtime on those hours.  If an employee continues to disregard scheduled hours, it would be a disciplinary issue to be addressed according to your company policy.

You do have a written company policy and employee handbook, right?

Confused?

We can help.  ManageStaff will partner with you to keep you in compliance with complicated wage and hour laws.  Make it easy on yourself and give us a call.

Don’t you think it’s about time?

image: amenic181/freedigitalphotos.net