Several locations? Beware accidental OT trap

by on
in Leaders & Managers,Management Training

Here’s a trap you may fall into accidentally: If you have multiple locations, each operating independently, watch out for wage-and-hour violations involving employees who work at more than one location.

Here’s why: The U.S. Department of Labor (DOL) has been on the lookout for employers that don’t pay overtime when the same person works at multiple locations. As punishment, the agency will demand you pay double the amount of any overtime you owe. That’s true even if you claim you didn’t know employees were working at more than one location, and even if they never complained that they weren’t paid overtime.

Recent case:
The DOL sued the owners of five Famous Dave’s restaurants for allegedly not paying appropriate overtime to employees who worked at more than one of the restaurants. Each restaurant was independently managed and scheduled its employees without input from other restaurants or senior management at headquarters.

Eleven employees applied to work at more than one Famous Dave’s. Several revealed on their applications that they already worked at another location. But because the company used an independent, third-party payroll vendor to handle all payroll, and because that vendor didn’t check to see whether the restaurants employed some of the same workers, about 25 workers missed out on overtime pay for their combined hours.

The DOL won $90,000 in unpaid wages for the employees and demanded liquidated damages, too. The owners protested, claiming they didn’t even know that some employees worked at more than one location.

The 8th Circuit Court of Appeals said the chain owed double damages because employers are responsible for knowing whether employees work at more than one location. (Chao v. Barbeque Ventures, et al., No. 08-1284, 8th Cir., 2008)

Leave a Comment