FLSA Violations: Avoid Having the DOL Come After Your Organization!

  One of the hottest topics for employers right now-- and one that employers need to make sure they “get right”-- is the Fair Labor Standards Act (FLSA).

The Department of Labor (DOL) has promised to wage an all out war of enforcement on misclassification of employees, targeting employers in coming years that misclassify employees as independent contractors rather than employees and/or as exempt when, in fact, they should be non-exempt. 

The Department of Labor has set aside $25 million of its 2011 budget to help combat employee misclassification.  The proposed 2012 Department of Labor budget includes $46 million dollars specifically to address worker misclassification, which includes hiring 90 new DOL investigators.  You can expect increased enforcement by the DOL this year with regard to FLSA misclassifications by employers.  This crackdown is supposed to bring in at least $7 billion for the federal government over 10 years.

Not only is the Department of Labor increasing its FLSA enforcement but in addition, employees are coming up with new and innovative claims to make under the FLSA: i.e., claims that they were not paid overtime they were due when they were required to respond to text messages, e-mails and instant messages after work hours on their smartphones.  Another major issue for employers is not accurately counting the time that employees spend booting up and down their computers and therefore failing to pay their non-exempt employees overtime for this.

Now more than ever, employers need to make sure that they are understand FLSA requirements, including how to properly classify their employees as exempt vs. non-exempt and how to properly classify their workers as employees vs. independent contractors.  They also need to understand what counts as compensable time in the 21 ^st century, with smartphones and PDAs that allow employees to work and be available 24/7. 

In addition to HR understanding these FLSA compliance issues, they must also train their managers to ensure that managers do not take any actions that violate the FLSA or cause their exempt employees to lose exemption under the FLSA.