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How to draw DOL scrutiny: Withhold pay, fudge time sheets

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in Human Resources,Overtime Labor Laws

The Department of Labor’s Wage and Hour Division doesn’t want to see any funny business when it comes to accurately recording hours worked or paying employees on time.

Don’t even think about manipulating payroll systems. Doing so will result in double damages going back three years.

Recent case: A-1 Mortgage em­ployed telemarketers to call potential customers who might be interested in refinancing their mortgages. Some of the telemarketers complained to the Department of Labor (DOL) that instead of getting paid on regular paydays, they were only paid straight commissions based on settled real estate transactions. They also complained that their supervisors told them to record no more than 40 hours worked per week on their time sheets.

The DOL sued, alleging that the company sometimes didn’t pay em­­ployees for weeks or even months.

It alleged A-1 held their paychecks until transactions closed, even though the dates on the checks showed payment was made on regular paydays. This, the agency argued, was illegal. The employees should have been paid at least minimum wage each week they worked.

The court agreed and ruled that the company violated the Fair Labor Standards Act (FLSA) by failing to record hours accurately, failing to pay at least minimum wage for hours worked and by withholding pay until transactions closed. The court said the violation was willful and doubled the amount the company owed for unpaid wages going back three full years. (Solis v. A-1 Mortgage, et al., No. 09-1265, WD PA, 2013)

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