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Court: No FLSA poster equals unlimited liability

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in Employment Law,Human Resources

For want of a thumbtack, the Fair Labor Standards Act’s (FLSA) statute of limitations didn’t run. In a case involving a domestic worker’s pay dispute but equally applicable to any employment situation, a federal appeals court ruled that failing to display the Department of Labor’s minimum wage poster meant an employer was on the hook for years of wage-and-hour violations.

Recent case: An employee from the Philippines began working in the United States as a domestic worker in 2002. She put in 18-hour days and was paid an average of $250 a month. He employer forced her to sign false time sheets and endorse paychecks she never received.

She left the job in 2013 and sued for 11 years of FLSA violations. Her employer wanted the case dismissed, citing the three-year statute of limitations for willful FLSA violations.

A trial court dismissed the case, but the 4th Circuit put it back in play, ruling for the first time that the FLSA’s statute of limitations may be tolled, or prevented from running, when an employer fails to post required notices.

The appeals court ruled that the purpose of the posting requirement is to ensure that employees are aware of and able to assert their rights. Since the FLSA didn’t impose any penalties on employers that didn’t post notices, the court reasoned that without tolling, employers wouldn’t have any incentive to comply with the law.

The upshot: An employer that normally would have been liable for three years’ worth of willful FLSA violations may be on the hook for violations stretching back 11 years. (Cruz v. Maypa, No. 13-2363, 4th Cir., 2014)

Advice: Don’t let a careless omission empty your bank account. Display the official DOL minimum wage poster in a conspicuous place where employees can see it. You can post the notice online, but be aware that the DOL has yet to conclude that online posting meets the FLSA’s standards.

Online resources: Official info from the Department of Labor

Download the DOL’s minimum wage poster and find complete wage-and-hour resources for employers.

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