Overtime Pay Mistakes Make DOL News Releases for Two Texas Panhandle Employers

by Adair Melinsky Buckner on May. 31, 2013

Employment Employment  Labor Law Employment  Employee Rights 

Summary: Overtime pay mistakes

overtime payment mistakesNot paying overtime correctly continues to be one of employers’ most frequent and costly traps.  The U.S. Department of Labor (DOL) has issued two press releases in recent months requiring back overtime pay by area employers for overtime violations following a DOL investigation and issued warnings to all employers to pay correctly.  The first was issued on January 22, 2013, against Diversified Interiors of Amarillo, Ltd. (“DI”), an Amarillo construction-related firm, for $76,417 back overtime wages to 63 employees, and the second was issued on February 6, 2013, against Austin Industrial Services LP, a construction company providing maintenance and construction work for the Phillips 66 oil and gas refinery in Borger, for $214,398 in overtime back wages to 13 employees.  Both situations include lessons on correctly paying overtime that employers already should know, but if they don’t, they need to learn fast.

In the DI investigation, the DOL found that non-exempt workers were not being paid time and one-half (only straight time) for hours worked beyond the normal shifts unless the company had scheduled the overtime in advance for them.  They were not paid overtime pay for travel time to and from jobs beyond the normal shift.  In its DI press release, DOL strongly stated that “(T)he FLSA requires that 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 rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week.”  DOL went on to say, “(I)n general, hours worked includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday.”  Specifically, hours worked includes travel between the employer’s facility and the job sites and time waiting at the employer’s facility to be sent out on jobs.  DI also did not keep records as it should have of hours worked and agreed to do so as part of the investigation settlement.

In the Austin Industrial Services (“AIS”) investigation, DOL found that some managers at the company had been told they would be paid a salary, but were paid on an hourly basis, and were docked when they worked less than 40 hours a week.  The press release reiterates that to be exempt from minimum wage and overtime pay individuals must meet the tests regarding their job duties, be paid on a salary basis at not less than $455 per week, and that the specific job duties and salary must meet all the requirements of the DOL’s regulations.  Here, they did not, including being docked for less than 40 hours a week work.  The managers regularly worked over 50 hours, but were not paid time and one-half for hours worked beyond 40 in a workweek.  ASI had to pay these managers for all their overtime back wages. The DOL also found AIS did not keep accurate records of hours worked as required by the FLSA and had to agree to do so going forward.

Both these DOL press releases say explicitly that these back wages awards should serve as a warning to employers to ensure that they are paying their employees in compliance with federal labor law.  DOL goes on to say it “will not hesitate to investigate and to seek remedies in cases” where employees are not being properly paid.  These are but two local examples.  Employers you have been warned!!  Learn the regulations, audit your pay practices, and get your houses in order.  DOL may be knocking on your door next.

Adair Buckner is an Amarillo attorney with Buckner & Cross, L.L.P.  She is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Her other areas of practice include business law, business disputes, commercial litigation, estate planning, and probate. You can reach Adair at (806)-322-7777 or adair@bucknercross-law.com. This material is not intended to be legal advice. The contents are intended for general information purposes only.

To learn more about Adair visit her profile page and her practice labor and employment law.

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