New DOL fines show 3 pay pitfalls companies must avoid right now

Recent settlements with companies like yours due to issues related to employee pay can remind your Payroll pros to continue to be cautious.

Here are three recent fines from the Dept. of Labor (DOL) regarding specific situations that could trip up your company – especially your Payroll team.

Ignored pay inquiries & paid the price

When employees have questions about their pay, whether they’re about the frequency or amount, it’s key to address them immediately – and not ignore them or take other retaliatory actions.

M. Davis Insurance Agency Inc., which operates as Marc Davis State Farm in Georgia, terminated one of its workers after the person asked for additional info about their pay. Rather than address the person’s questions, the agency let the employee go.

What started as an investigation from the DOL ended up being resolved by a court. The U.S District Court for the Northern District of Georgia ordered the employer to pay the former employee $50,000 in back wages and damages for the unlawful termination.

FMLA, FLSA violations trip up employer

The DOL is currently cracking down on employers that don’t inform workers of their rights to protected leave under the Family and Medical Leave Act (FMLA). One of the agency’s most recent FMLA investigations involved an assisted living facility in Lake City, FL.

Willowbrook at Marion LLC, doing business as Willowbrook Assisted Living, didn’t offer an employee FMLA-protected leave for a serious medical condition. Instead, the worker was terminated for their absences.

Along with this, the facility also violated the Fair Labor Standards Act (FLSA) by not paying the worker for any hours they worked over 40 in a workweek, because it erroneously assumed the employee was exempt. And it didn’t keep accurate records of the person’s time worked.

In addition, another employee who wasn’t terminated didn’t receive overtime pay as required. The DOL ordered Willowbrook to pay the two employees $7,036 in back overtime wages. The terminated worker received an additional $1,894 in back wages for the FMLA violation.

Docked workers’ pay for uniforms

Employers often charge new employees for uniforms and other necessary tools for their employment. If these fees are automatically taken from their paychecks and put their pay below the federal minimum wage, this can run afoul of the FLSA. A Georgia tire retailer learned this the hard way.

Cherokee Tire Service LLC kept the entire first weekly paycheck from 19 employees as a uniform deposit. Since they weren’t paid the minimum wage for that week, this practice directly violated the FLSA.

The employer also failed to add bonuses the workers received into their hourly rates when calculating their overtime pay, and it didn’t keep accurate records of workers’ hours and pay.

Because of all these issues, the DOL ordered Cherokee Tire to pay $161,983 in back wages and damages to the employees.