Criminal Penalties for FLSA Violations?

By Michael King posted 11 days ago

  

QUESTION:    I THOUGHT THAT ONLY THE COMPANY COULD BE PENALIZED FOR FAIR LABOR STANDARDS ACT VIOLATIONS?

ANSWER:       WHEN A TEXAS ROPE COMPANY GOT TIED UP WITH THE DEPARTMENT OF LABOR, THE OWNER, PLANT MANAGER AND OFFICE MANAGER WENT TO JAIL!

 

Numerous federal laws include civil liability for individuals who fail to comply with the laws. Some federal laws even provide for individual criminal liability for company owners and managers.

Don’t let the boss rope you into breaking the law!

The U.S. Attorney’s office charged that High Performance Ropes of America, Inc. did not pay overtime compensation, back wages, employment benefits, and other compensation, required by the Fair Labor Standards Act. United States v. High Performance Ropes of America, Inc., No. W-13-CR-140(01) (W.D.Tex., 8/12/13.)

In fact, the government charged that when the employees were paid, they were hauled down to Compass Bank in Belton, Texas to cash the checks and pay money back to High Performance Ropes to hide the Fair Labor Standards Act violations!

The owner, plant manager and office manager, Luis Alvarez Jr., Mario Champo, and Mary Becerra were convicted on separate felony counts and went to prison.

What not to do under the Fair Labor Standards Act.

High Performance Ropes was strung up for making false statements to the Department of Labor and ordered to pay $165,356 in overtime back wages and liquidated damages to 31 employees. It was also “fined $12,100 in civil money penalties for repeat and willful violations of the Fair Labor Standards Act and received a court-ordered fined of $10,000.”

High Performance Ropes failed to pay employees time and one-half for hours worked in excess of 40 hours in a work week.

“A corporate officer signed numerous United States Department of Labor Forms WH-58 and certified under penalty of perjury that numerous employees had been paid back wages, employment benefits or other compensation, pursuant to the Fair Labor Standards Act.” The corporate officers submitted the false payment evidence to the government even though they knew that the workers had been forced to pay kick-backs out of their paychecks down at the local bank.

The rope company also kept a second set of books which the managers hid from federal investigators. The information withheld showed that some employees worked up to 96 hours per work week without overtime compensation.

How do you keep from being hoisted for Fair Labor Standards Act violations?

First, keep in mind that non-exempt employees must be paid at least the federal minimum wage for all hours worked. Second, non-exempt employees must be paid one and one-half times the regular pay rate for time worked over 40 hours per week. For non-exempt employees, that includes commissions, bonuses and incentive pay.

Companies must maintain accurate employment records including the time worked by employees. Employers must maintain accurate payroll records.

Taking the workers to the bank to make sure they pay kick-backs to the employer and to hide the labor violations will get you in trouble every time!

Employers who violate the Fair Labor Standards Act are liable to employees for back wages and usually an equal amount in liquidated damages. Those amounts get paid to the affected employees.

What should managers do to protect themselves?

Never intentionally violate laws or regulations!

In addition, recognize and report any violations, or any attempts to silence complaints or prevent employees from exercising legal rights. Likewise, don’t participate in and be sure to report any events of retaliation, fraud or violations of safety issues.

Compliance with federal laws and regulations can be very complicated. Many federal laws and regulatory schemes are punishable by individual civil liability, and a few permit individual criminal liability. If you have questions about complying with laws and regulations in your business, please call me.

Michael R. King
Gammage & Burnham Attorneys at Law

Mking@gblaw.com   602-256-4405

This article may be  distributed with attribution but may not be excerpted or modified without the permission of the author.  Copyright © 2019
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