Paychecks allegedly shorted: Avoid 1 company’s mistakes

Any employee complaints about missing or inaccurate pay should be taken seriously. Even if you think the worker’s crying wolf, putting their paycheck concerns on the back burner could land you in the middle of a costly fight with the feds.

This happened to a staffing agency based in New Jersey: Advantix Logistics Corp.

Paycheck dispute

An employee at Advantix kept claiming their paycheck was smaller than expected. After this happened a few times, the company fired the worker. The worker then complained that the final paycheck also didn’t have all the wages it should’ve included.

According to the Dept. of Labor (DOL), Advantix threatened further retaliation against the employee after the person asked about their final check. So, the agency promptly filed a complaint against the company.

The DOL is currently seeking back wages and damages for the terminated worker.

Federal scrutiny

While the complaint makes its way through the courts, Advantix faces further scrutiny from the DOL. The agency obtained a temporary restraining order against the company that requires the company to:

• notify the DOL in writing at least seven days before any employee is terminated for any reason, and
• permit DOL reps to read a statement about employees’ rights under the Fair Labor Standards Act (FLSA) in all the languages workers speak.

In addition, the order forbids Advantix from retaliating against the employee named in the complaint. The company also can’t take any other actions that would hinder the DOL’s investigation.

If the complaint is resolved in the DOL’s favor, Advantix will be under a permanent order where the agency will keep its eyes peeled for future FLSA violations or retaliation.

Accuracy, communication crucial

This goes to show how important it is for Payroll to ensure workers’ pay is correct. It’s also key to have clear, complete records that document how much employees should receive each pay period.

Accuracy is particularly crucial when handling termination pay.

With final paychecks, not only is there the DOL to worry about, several state and local governments have guidelines companies must follow in terms of timely pay. And breaking these rules can have costly consequences for employers.

If employees have any questions or concerns about the amount of their paycheck (especially if it’s an issue with their last paycheck), be sure Payroll addresses them ASAP.

Communication and quick answers about any discrepancies up front will help you avoid expensive legal battles down the line.